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China's Challenges Pile Up as Factories Slow Amid Trade Standoff

  • Factory employment gauge tumbles to lowest level since 2009
  • New export orders fall deeper into contraction on trade war
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Grace Ng, senior China economist at JPMorgan, discusses China’s May PMI data and what it means for the economy.(Source: Bloomberg)
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China’s manufacturing sector slowed more than expected and further signs of stress in the labor market appeared, adding to a weakening currency and financial nervousness on the list of problems faced by President Xi Jinping as the trade war worsens.

The manufacturing purchasing managers’ index for May slid into contraction at 49.4 and its employment sub-index tumbled to the lowest level since the aftermath of the global financial crisis. The yuan has fallen 2.5% in May, and stocks had a tough month as turbulence from Trump’s tariff hike hit home. If that wasn’t enough, the first government seizure of a Chinese bank in 20 years also has spooked markets.