Reportedly, China’s manufacturing activity grew in August, as per to results of a private poll released as production surged, but export sales declined in the middle of the country’s ongoing trade war with the U.S. The Caixin-Markit factory PMI (Purchasing Managers’ Index) was 50.4 for August, which is better than the 49.8 analysts surveyed by Reuters had projected. The Caixin-Markit manufacturing PMI was 49.9 for July. The PMI readings higher than 50 indicate expansion, while, those under that indicate contraction. Zhengsheng Zhong—Director of Macroeconomic Analysis at CEBM Group—stated that the sub-index for fresh orders stayed in developing territory in August, but declined from July, indicating flat demand for manufactured goods.
Nevertheless, “the gauge for fresh export orders was in slowdown curve and dropped to the lowest level in this year, imitating declining overseas demand in the middle of an intensifying trade battle amid the U.S. and China,” Zhong said during a press release. The two countries slapped new tariffs on each other’s goods in recent time. In spite of the improved title PMI reading in August, which was due in part to enhanced production activity, the prospect is not rosy with long-term declining pressure, asserted Zhong.
On a similar note, China took cautious measures with new levies, leaving most to December. Apparently, China is moving steadily in the execution of retaliatory tariffs since trade tensions with the U.S. shoot up. The Chinese administration pushed increased tariffs of between 5–10% on a range of major American products exported to China, counting crude oil and soybeans. Nevertheless, the proportion of levies that kicked in only accounted for almost one-third of the over 5,000 product lines registered in the latest declaration. Most of the tariffs will take effect from December 15, and China’s intends to recall tariffs on the U.S. autos and auto parts will not happen until that time.