BEIJING: A report Monday on Chinese manufacturing suggested that Beijing’s trade war with the Trump administration is causing economic damage.

Surveys of manufacturers across the region for May showed that business confidence has been shaken by the conflict over President Donald Trump’s demands that Beijing change its industrial planning strategy and find other ways to redress its perennially huge trade surpluses.

A private survey, the Caixin manufacturing purchasing managers’ index, or PMI, for China held steady at 50.2 in May, just above the 50 level that distinguishes between expansion and contraction. But business confidence slipped to its lowest level since the series began in April 2012. The official manufacturing PMI, issued Friday, sank to one of the lowest levels in three years.

China showed no signs of budging over the Trump administration’s demands. It issued a report over the weekend saying it would not back down on “major issues of principle.” It said Beijing had kept its word through 11 rounds of trade negotiations and accused Washington of backtracking by introducing new tariffs and other conditions beyond what had been agreed to.

Most of Trump’s ire over trade has been directed at China, given its lion-sized importance to global manufacturing and its growing technological prowess. But last week the president heaped more uncertainty on global financial markets and investors by saying he would impose 5 per cent tariffs on Mexican imports starting June 10 if the Mexicans don’t stop the surge of Central American migrants across the southern US border.

That would be a blow to some manufacturers that use Mexico as production bases, such as automakers.

Meanwhile, the world’s largest association of technology professionals backed away from barring employees of Chinese tech giant Huawei Technologies from some of its activities.

Published in Dawn, June 4th, 2019