China's factories suffer biggest slump in three years amid Trump tariffs
Chinese factories suffered their sharpest fall in new orders since September 2022, a closely watched survey showed, as bosses grappled with Donald Trump's tariff war.
Manufacturing activity hit a nearly three-year low in May, according to the Caixin China General Manufacturing PMI.
The reading of 48.3 signalled an unexpected contraction in the powerhouse of China's economy.
Zichun Huang of Capital Economics said: 'The surprisingly sharp fall... means that the survey data now point to a loss of economic momentum last month.
'Domestic headwinds (are) more than offsetting the boost from the US-China trade truce.'
China and the United States agreed last month to temporarily halt most tit-for-tat tariffs on each other's goods, providing some much-needed relief to global markets.
However, that agreement has been thrown into doubt after President Trump and Beijing accused each other of violating the terms of the deal in recent days.
Wang Zhe, senior economist at Caixin Insight Group, said the slowdown was linked to 'sluggish external demand, which fell for a second straight month'.
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