Tariff friction dampens exports with price pressures on rise

The activity of China's manufacturing sector contracted slightly in June as the corporate sector dealt with rising input costs and declining export orders amid escalating trade frictions between the world's top two economies, according to a private survey released on Monday.

The Caixin/Markit manufacturing purchasing managers index dropped to 51 in June from 51.1 in May, but remained above the 50-point mark, which separates growth from contraction, for the 13th consecutive month.

"Overall, the manufacturing PMI survey pointed to strengthening price pressures in June. Deteriorating exports and weak employment, along with companies' destocking and poor capital turnover, put pressure on the manufacturing sector," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, in a note accompanying the release of the survey.