Amid Trade Talks, China's Factory Activity Shrinks but Tariff Deals Offer Hope

China's factory activity contracted in May, though at a slower pace, after a deal with the US reduced tariffs. The Purchasing Managers Index showed slight growth, but the industry faces uncertainty with ongoing trade tensions and visa issues between the U.S. and China.


Devdiscourse News Desk | Beijing | Updated: 31-05-2025 11:04 IST | Created: 31-05-2025 11:04 IST
Amid Trade Talks, China's Factory Activity Shrinks but Tariff Deals Offer Hope
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China's factory activity saw a contraction in May, though the decline decelerated, according to an official survey released Saturday. This comes as China and the United States struck a deal to cut President Donald Trump's high tariffs.

The Purchasing Managers Index (PMI) increased from 49.0 in April to 49.5 in May, as per the National Bureau of Statistics. A PMI below 50 signifies contraction. Despite showing growth, the manufacturing index's new orders remained under 50.

Statistical data from Zhao Qinghe of China's National Bureau of Statistics highlighted faster resumption of trade orders from U.S-related companies, amid improved import-export conditions. The U.S.-China deal signed earlier slashed tariffs to 30% and reduced China's taxes on U.S. goods, stirring investor concerns, exacerbated by U.S visa restrictions on Chinese students.

(With inputs from agencies.)

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