China's output falls a third straight month

New export orders are still languishing

- JOE CASH

China's manufacturing activity shrank for a third straight month in June, though at a slower pace, as increases in new orders, purchasing volumes and supplier delivery times signalled that policy support rolled out since late last year is taking effect.

But business sentiment remains subdued, yesterday's survey showed, with employment, factory gate prices and new export orders still languishing, and keeping alive calls for even more stimulus as authorities deal with US President Donald Trump's tariff onslaught and chronic weakness in the property sector.

The National Bureau of Statistics purchasing managers’ index (PMI) rose to 49.7 in June from 49.5 in May, matching the median forecast in a Reuters poll but remaining below the 50-mark that separates growth from contraction.

“Two months of successive improvement, that’s a decent reading given June was the first full month without Trump's prohibitive 100%-plus tariffs,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

“There is still evidence of frontloading in trade, but the tariffs are lower now and manufacturers are preparing to ship holiday season goods,” he added.