China's factory activity shrinks despite trade truce with US

China's factory activity contracted in August, marking five consecutive months of decline, according to an official survey released Sunday, after a trade truce between the US and China was extended for another 90 days.

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China's purchasing managers index in the manufacturing sector rose from 49.3 in July to 49.4 in August, indicating the decline slowed from the previous month, the National Bureau of Statistics said. PMI is measured on a scale from O to 100, where 50 marks the cutoff between expansion and contraction.

The indices measuring manufacturing, new orders and raw material inventory edged up in the sector. But the index measuring employment saw a slight drop.

The survey results came weeks after US President Donald Trump extended a pause in sharp hikes in import duties for 90 days. But uncertainty over tariffs on exports to the US is still looming over the world’s second-largest economy.