A: Hey buddy! Did you catch the latest on China's manufacturing activity?
B: Nah, what's up?

A: Well, it looks like a key measure they use dropped below a certain line for two months in a row!
B: Whoa, that sounds serious. What does it mean exactly?

A: It means there might be less production going on in China's factories compared to normal. The figure was 49.5 this month, which is actually a slight improvement from last time.
B: I see. So, they surveyed about 3,200 manufacturers to find that number, right?

A: Exactly! Figures above 50 represent growth, and those below indicate contraction. However, it's not all bad news - the large companies fared better than midsize and small enterprises.
B: Oh, the readings for large firms were at 50.7, while the others were lower?

A: Yep, that's right! Midsize firms were at 47.5 and small enterprises at 49.3. Service sector businesses also saw a slight dip to 50.3 this month.
B: This comes after their trade truce with the US last month, right? They agreed to reduce tariffs for a while.

A: That's exactly it! Under the deal, both sides lowered their additional tariffs by a lot, but the reduction is only temporary and might be suspended if they can't agree on things within 90 days.
B: So, there's still tension between China and the US? What happens if they can't reach an agreement?

A: That's what everyone's worried about. If the negotiations fail, there could be more friction and potential return of tariffs. But for now, let's hope it stays calm!
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A key gauge of China's manufacturing activity has fallen below the boom-or-bust line for the second straight month. China and the United States agreed to temporarily reduce tit-for-tat levies in May, but uncertainties remain.



The Purchasing Managers' Index for May came in at 49.5. That's up 0.5 points from the figure the previous month.



The National Bureau of Statistics surveyed 3,200 manufacturers in compiling the index. Figures above 50 represent growth while those below indicate contraction.



The gauge for large companies stood at 50.7, but midsize firms were at 47.5, and small enterprises at 49.3.



The readings for non-manufacturers, such as service sector businesses, dropped 0.1 percentage points from the previous month to 50.3 in May.



These figures follow a trade truce reached last month between China and the United States.



Under the deal, both sides cut their additional tariffs by 115 percentage points, with part of the cut suspended for 90 days.



It raises hopes of easing tension. But concerns remain that friction may return if their negotiations break down.