China's manufacturing slump triggers economic response
Chinese manufacturing activity in May experienced its fastest decline since September 2022. The PMI index, which assesses the economic health of China's industrial sector, stood at 48.3 points in May, down from 50.4 points at the end of the previous month, according to Caixin Media's calculations.
Chinese industrial production contracted in May at its quickest pace since September 2022.
The PMI index, which reflects the economic condition of China's industrial sector, was 48.3 points in May, compared to 50.4 points at the end of the previous month, as reported by Caixin Media. Analysts had anticipated the index to be at 50.7 points.
"The job market remained grim, with employment shrinking for the second straight month and at the fastest clip since January," reports CNBC.
In reaction to these results, Chinese policymakers introduced a set of measures to invigorate the economy and support businesses impacted by American tariffs. This includes, among other initiatives, reducing interest rates and reserve requirements for banks, adds CNBC.
US-China trade war
In May, Beijing and Washington agreed to suspend tariffs on each other for 90 days. The agreement, described by the media as a temporary truce in the trade war, was reached following bilateral ministerial talks in Geneva.
As part of the solution devised at the time, Washington and Beijing agreed to temporarily cut tariffs - the US from 145% to 30% on Chinese products, and China from 125% to 10% on American products.
At the end of May, Donald Trump stated on his social media platform, Truth Social, that the tariffs he imposed effectively severed China from the American market, which was "devastating" so he had "made a FAST DEAL" to save them from "what I thought was going to be a very bad situation".
"The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US," the president remarked, without detailing what actions he intends to take against the PRC.
