China starts facing impact of trade war with US as manufacturing index falls

Chinese factory activity slowed in September, official data showed Sunday, as the Asian giant's trade war with the United States showed no sign of abating.

The Purchasing Managers' Index (PMI), a key gauge of factory conditions, came in at 50.8 for the month, down from 51.3 in August, the National Bureau of Statistics said.

The figure was below the 51.2 reading tipped in a Bloomberg News survey of economists.

Although the numbers indicated a slowdown, they remained above the 50-point mark that separates expansion from contraction.

A separate manufacturing index, calculated independently by the Caixin media group, also showed a deceleration.

"Exports increasingly dragged down performance and continued softening demand began to have an impact on companies' production," said Caixin analyst Zhengsheng Zhong.

"In addition, the employment situation worsened further. Downward pressure on China's economy was significant." US President Donald Trump last week imposed a further $200 billion in tariffs on Chinese goods and vowed to press on until Beijing buckles.

His latest volley against China, which retaliated with more levies of its own, brings the number of goods hit by duties to more than $250 billion, roughly half of China's US exports.

A brighter outlook could be found away from China's factories, however, with an official gauge of non-manufacturing activity showing the sector expanding to 54.9 in September from 54.2 in August.

(With inputs from agencies.)