China’s Manufacturing Treads Water in June as Services Perk Up

China’s official factory gauge retreated to the dividing line between improvement and deterioration last month, while a measure of services perked up, underscoring the two-speed pace of growth in the world’s second-largest economy.

While factory output remains weighed down by a tepid global growth outlook -- made more gloomy by Britain’s vote to exit the European Union -- domestic demand has held up as spending on services from delivered lunches to cinema tickets takes off. The central bank has kept its main rates at a record low since October as policy makers seek to rein in overcapacity without derailing the economy, leaving the onus on fiscal measures to underpin growth.