China June Factory Activity Expands

China's factory activity, as measured by the official Purchasing Managers' Index (PMI), expanded in June, rising to 50.3 from 50.0 in May. This growth was primarily fueled by strong high-tech manufacturing exports, particularly those linked to the AI boom, indicating robust international demand for semiconductors and advanced electronics. Despite this positive development, other exports and domestic demand remain subdued, with retail sales falling and new home prices declining. The China — National Bureau of Statistics of China reported that the non-manufacturing PMI also improved to 50.2. China's central bank has instructed commercial banks to increase lending to stimulate the economy. Trade tensions with the United States persist, with new Section 301 tariffs expected in late July, and a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping in May yielded no significant breakthroughs on tariffs or the Iran war.