Growth of Chinese factories slows in June as trade tensions rise

"Domestic demand weakens and external demand is under pressure from escalating trade friction between China and the United States," said Wen Bin, chief economist at Bank Minsheng in Beijing. Beijing. Banks will reduce reserve requirement ratios (RRRs) in the coming months to help prevent a deeper economic slowdown.

The central bank announced on June 24 that it would reduce the RRR by 50 basis points to accelerate the pace of debt After the official PMI of the May plant peaked by eight months, more and more signs indicate that the Chinese economy is finally slowing down. the government is reducing many types of loans, and the tightening of liquidity seems to be affecting growth.

On July 16, the government is expected to release data on second-quarter growth in gross domestic product (GDP) and other factors.

ANZ analysts expect 6.7% growth in the second quarter, up from 6.8% in the first quarter.

In May, industrial production, retail sales and capital investment fell short of expectations. Local governments have curtailed their construction projects despite scrutiny of their borrowings by Beijing

While the economy could probably handle these domestic challenges without slowing growth, the trade dispute with the United States United adds to the uncertainty about the reaction of the Chinese economy. ] While US President Donald Trump has stepped up pressure on China with threats of new tariffs and investment restrictions, stock markets and the Chinese currency have suffered one of their worst months ever since. years in June.