China’s Factory Activity Contraction Eases After Trade War Truce

China’s factory activity contracted at a slower rate in May after a reprieve in the tariff war with the US unclogged trade flows, even as weak domestic demand continues to weigh on the economy.

The official manufacturing purchasing managers’ index was 49.5, versus 49 in April, the National Bureau of Statistics said Saturday. That matched the median estimate of economists surveyed by Bloomberg. A reading below 50 indicates contraction.

The non-manufacturing measure of activity in construction and services fell to 50.3 from 50.4 in April, the statistics office said. That compares with a forecast of 50.5. The composite index rose ...