China’s PMI to Show Signs of Contraction Over Trade War Tensions

Factory activity in China is expected to show an impact of the ongoing trade war, with economists expecting the official PMI to shrink to 49.9 in May from 50.1 in April. This figure is expected to come in below the 50-threshold, indicating contraction.

In April, a slew of economic data pointed to signs of weakening in the economy, including industrial output, exports and retail sales. In the face of the recent tariff hikes announced by the US, these figures are only expected to get worse.

US President Trump had increased tariffs on $200 billion worth of Chinese goods and has threatened additional tariffs of up to 25% on another $300 billion of goods. Global economic growth, trade and business investment have already been impacted on account of the tariff war between the two world leaders.

Meanwhile, the Caixin manufacturing PMI figure is also expected to show a stall in growth for May at 50.o, down from 50.2 in April.