China manufacturing shrinks in June despite trade war respite
by AFP Staff Writers
Beijing (AFP) June 30, 2025

China's manufacturing activity ticked up in June but remained in contraction territory, official data showed on Monday, as the truce in its trade war with the United States held.

The Purchasing Managers' Index -- a key measure of industrial output -- came in at 49.7, according to the National Bureau of Statistics (NBS).

The figure was higher than May's 49.5 and slightly above the 49.6 estimated by a Bloomberg pool of analysts.

However, it fell below the 50-point mark separating growth and contraction for the third straight month.

China's "economic prosperity level remained expansionary overall" in June, NBS statistician Zhao Qinghe said in a statement.

"Manufacturing production activity accelerated, and market demand improved," Zhao said.

Zichun Huang, China economist at Capital Economics, said the June figures "suggest that China's economy regained some momentum, supported by a rebound in manufacturing and construction".

"But we remain cautious about the outlook, as weaker export growth and a fading fiscal tailwind is likely to slow activity in the second half of the year," Huang said.

China's economy has struggled to sustain its post-pandemic recovery as it battles a prolonged debt crisis in the crucial property sector, chronically low consumption and elevated youth unemployment.

It has also been hit by a fusillade of import tariffs unleashed by US President Donald Trump since the start of the year.

However, Beijing and Washington called a truce on the staggeringly high duties in May, and Trump said on Sunday that the United States was "getting along well with China".

US stocks back at records on US-China trade progress
New York (AFP) June 27, 2025 - Wall Street stocks finished at fresh records Friday as US-China trade progress restored the market to its heights prior to a spring swoon brought by President Donald Trump's tariffs.

Both the S&P 500 and Nasdaq finished at all-time highs following a roller-coaster session that included a stint in negative territory after Trump announced he was breaking off trade talks with Canada, rupturing a series of largely positive headlines on trade.

Earlier, European stock markets also rose, with the Paris CAC 40 leading the way, boosted by a rise in luxury stocks.

The records reflect improved sentiment, with the Iran-Israel ceasefire adding to positive movement on trade compared with the spring.

"There is hope in the market, there may be some over-optimism around some things," said Jason Schenker of Prestige Economics. "But there was a lot of optimism."

Friday's session was not without volatility. US stocks opened higher and were solidly positive through early afternoon when Trump blasted Canada's digital services tax in a social media post that called the country "very difficult" to trade with.

But after slipping into the red, both the S&P 500 and Nasdaq returned to positive territory, finishing with gains for both indices and ending at records.

Tom Cahill, chief investment officer at Ventura Wealth Management said other trade news developments in recent days had been positive, including Washington and Beijing's confirmation on finalizing a framework to move forward on trade.

"The news has been incrementally more positive since April on the trade front," Cahill said.

The S&P 500 last hit a record in February, but began to come under pressure thereafter as Trump began to sharpen his rhetoric on trade. This culminated with Trump's April 2 "Liberation Day" vow to implement steep new levies on trading partners.

Trump has since suspended the most onerous elements of his trade overhaul, while still implementing the biggest US tariffs imposed in decades.

That has raised concerns about inflation. The personal consumption expenditures price index climbed 2.3 percent last month from a year ago, according to data released Friday.

This was in line with analyst expectations and a slight acceleration from April's 2.2 percent increase.

But Cahill said the tariffs have thus far not resulted in significant inflationary pressures, raising hopes about Federal Reserve easing.

"Now the market is starting to anticipate a Fed rate cut in September," said Cahill, who also pointed to a boom in artificial intelligence investment as a driver of equity market momentum.

"Overall the backdrop is supportive of equity prices and I think they will drift higher," Cahill said.

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