China manufacturing activity shrinks in May as US tariffs bite
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The news: China's monthly manufacturing activity shrank for the first time in eight months, a sign that US tariffs are beginning to impact the world's second-largest economy.
The numbers: The Caixin/S&P Global manufacturing PMI fell to 48.3 in May from 50.4 in April, a private-sector survey showed, crossing the 50-mark that separates growth from contraction.
It was the first contraction since September last year and marked the lowest reading in 32 months.
The context: The result comes two weeks after negotiations resulted in a 90-day truce in the ongoing trade war between the US and China.
The US subsequently lowered tariffs imposed on goods from China from 145% to 30%. China's retaliatory tariffs on US goods dropped from 125% to 10%.
On Monday, however, Beijing said the US had violated the agreement, including by stopping sales of computer chip design software to Chinese companies, warning against using chips made by Chinese tech giant Huawei, and cancelling visas for Chinese students.
Meanwhile, Trump administration officials have pushed for a call between the two countries' leaders as soon as this week.
The source: Reuters
