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China’s manufacturing growth expected to slip marginally

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BEIJING: Growth in China's vast manufacturing sector is expected to have dipped, but only marginally this month, easing concerns of a slowdown in the world's second-biggest economy as fears of a trade war with the US ebbed.

The official manufacturing Purchasing Managers' Index (PMI) is seen slipping to 51.3 from 51.4 in April, according to the median forecast of 30 economists in a Reuters poll.

The 50-point mark divides expansion from contraction on a monthly basis.

That would mark the 22 straight month of expansion for China's manufacturing sector, and reinforce views that the economy will slow only modestly this year, good news for policymakers as they try to navigate debt risks and rocky trade relations with Washington.

Last week, Washington and Beijing both claimed victory as they stepped back from the brink of a trade war and agreed to hold talks to boost US exports to China. US Commerce Secretary Wilbur Ross will visit China this weekend for another round of talks.

Data last month painted a mixed picture for China's economy, with investment growth slowing to a near 20-year low and growth in retail sales sliding. But the industrial sector, a key source of jobs, stayed healthy with profits growing at the fastest pace in six months.

A private survey on China's factory activity is forecast to show a similar easing trend, with some analysts warning that a growing number of credit defaults is pointing to mounting pressure on small and medium-sized companies.

The private Caixin/Markit Manufacturing PMI is expected to have fallen slightly to 51 this month versus 51.1 in the last month. - REUTERS