Employment in services grew while deflationary pressure persisted, with the rate of discounting reaching the steepest in eight months. And even as confidence among businesses strengthened from April, it remained below average, according to the report.
“Both supply and demand grew at a slightly faster clip as businesses sought to acquire new clients,” Wang Zhe, senior economist at Caixin Insight Group, said in the statement. “However, foreign demand took a hit from the global trade conflict, with new export business declining for the first time this year.”China’s trade truce with the US has yet to turn around sentiment in an economy reeling from Donald Trump’s tariffs. A late night tweet from the US president saying Chinese leader Xi Jinping is “extremely hard to make a deal with” is putting any lasting agreement into question.
The focus now is on whether policymakers will be able to boost consumption fast enough to make up for a slowdown in overseas demand. Caixin’s survey for May showed China’s manufacturing sector had its worst slump since September 2022, as tariffs took a toll on smaller exporters.
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