China's Private and Official Manufacturing Activities Survey Show Diverging Results

Li Chen
01 Jul, 2024
Hong Kong

Asian markets lacked direction after China's official survey showed that the manufacturing sector contracted again and service sector growth slowed to a five-month low in June. 

The CSI 300 index declined 0.1% to 3,459.01, and financial markets in Hong Kong were closed to mark the handover of the city to China. 

China's manufacturing sector growth shrank for the second month in a row in June, the National Bureau of Statistics reported Monday. 

The manufacturing purchasing managers' index was 49.5 in June, matching the rate in May. 

The official gauge contracted for the fourth out of six months this year as policymakers struggle to revive business activity amid weak demand. 

The private survey conducted by Caixin showed improving activity for the eighth month in a row, and the growth rate reached a three-year high. 

The Caixin China General Manufacturing PMI increased to 51.8 in June from 51.7 in May, and new orders rose, but demand from foreign buyers slowed to a six-month low. 

The private survey conducted by Caixin includes a larger sample of medium- and small-scale companies in the private sector active in exports. 

The Japanese yen drifted to a new 34-year low in Tokyo's trading, raising fears of another round of competitive devaluation in Asia, which could force China, South Korea, and Taiwan to revalue their currencies. 

The euro edged higher after the far-right and far-left parties made significant gains in the first round of the French parliamentary elections, solidifying their positions. 

The National Rally Party won 34.1%, the left-wing New Popular Front Party won 28.1%, and the centrist Renaissance Party coalition controlled by President Emmanuel Macron received 20.8%, according to the preliminary results released by the Interior Ministry. 

France is headed for the second round of elections on July 7. 

 

China Stock Movers

Stocks declined in Shanghai trading, and banks, industrial companies, and electric vehicle makers were among the most active stocks. 

BYD declined 1.3% to ¥246.81, ICBC gained 1.6% to ¥5.80, China Vanke jumped 5.6% to ¥7.32, and CATL decreased 2.6% to ¥175.38.