The Chinese economists at Standard Chartered Bank (China) Limited offer their review on the Chinese economy, in the face of disappointing Chinese manufacturing PMI data.

“China’s economy remains under pressure, despite the US-China trade truce easing concerns of a further escalation in the trade war. Official manufacturing PMI remained below 50 in June, suggesting the sector is still under pressure. We expect industrial production (IP) and fixed asset investment (FAI) growth to have improved marginally in June on policy support and seasonal patterns. Exports likely contracted on weaker external demand. CPI inflation likely edged down from a peak level, while PPI inflation may have eased. We expect money growth to have picked up and credit growth to have eased in June. We expect GDP growth to have eased to 6.3% y/y in Q2 from 6.4% in Q1-2019, given the weakness in April-May.”