【招银国际】China Economy - Mild improvement after US-China tariff truce-250602（5页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 2 Jun 2025 CMB International Global Markets|Equity Research|Economic Perspectives China Economy Mild improvement after US-China tariff truce Chinas manufacturing PMI

2、shrank at a slower pace in May with production and new orders rebounding after US-China tariff truce.The effects of front-loading and export rerouting underpinned Chinas manufacturing resilience.The confidence shock to consumers appeared to be limited,with the service PMI remaining above 50 and dura

3、ble sales continuing to expand amid the trade-in program.However,deflationary pressure intensified as commodity prices slid following the tariff shock.Private business capex was weak as enterprises tried to keep inventory as low as possible amid increasing uncertainty.Looking forward,China might lau

4、nch additional fiscal stimulus to boost consumption and reduce excess capacity to rebalance its economy if the country could reach a trade deal with the US.We expect an additional 10bps LPR cut in 2H25.In the short term,USD/RMB rates might fluctuate within 7.20-7.25 before a moderate decline to 7.12

5、-7.17 if a trade deal is reached.There may also be two-way fluctuations in Chinese equities when the two largest economies hold trade talks,with a new rally potentially occurring after the two countries reach a deal.Manufacturing PMI narrowed its contraction after the tariff truce.Manufacturing PMI

6、rebounded to 49.5%in May from 49%in Apr,in line with market expectations.The rebound was primarily driven by production,rising from 49.8%to 50.7%in May,as the tariff truce lifted export and import orders to 47.5%and 47.1%,from 44.7%and 43.4%.Deflation pressure continued to intensify as raw material