# Factory Strength Holds Up in China as Fresh Trade Barriers Cloud the Second Half

> China's private sector manufacturing PMI came in at 51.7 in June, sealing the industry's strongest quarter in nearly six years, but Commerzbank warns that mounting trade friction is raising fresh risks to exports.

**Type:** article · **Category:** Market · **Published:** 2026-07-02 · **Source:** TrendKia
**Canonical:** https://trendkia.com/en/market/china-ke-karakhanon-men-dama-barakarara-para-nae-vyapara-avarodhon-se-dusari-chhamahi-para-mndaraya-khatara-4207 · **Language:** English
**Tags:** Chinese Yuan, Manufacturing PMI, Commerzbank, China exports, EU steel, forex market, gold price, US NFP

China's factories are proving more durable than many had expected, even as a growing wall of fresh trade barriers threatens to bear down on the country's exports in the months ahead. The latest reading of the private sector manufacturing PMI for June captures that split picture: output is holding its ground, yet the road forward looks anything but smooth.

## PMI seals nearly six years' best quarter
The private sector manufacturing PMI printed at 51.7 in June. That is a three-month low and a marginal slip from the previous 51.8, but it still edged past the 51.5 estimate. With that figure, the sector sealed its strongest quarter in nearly six years.

According to Commerzbank, the numbers confirm that the export-driven industrial sector is sustaining its momentum despite structural vulnerabilities in the broader economy. In other words, external demand is still propping up the factories even as challenges persist on the domestic front.

## Trade friction lifts risks for H2
Commerzbank cautioned that the accumulation of external trade friction is introducing new downside risks to the export growth trajectory for the second half of the year. A key driver is a set of recent moves by the European Union, which has targeted Chinese steel imports and small-parcel e-commerce shipments. Those measures could make life harder for exporters going forward.

## Dollar under pressure in currency markets
On Thursday, GBP/USD traded well above the 1.3300 barrier as the Greenback came under renewed selling pressure following a softer-than-expected US Non-Farm Payrolls (NFP) report for June. Cable extended its multi-day recovery and looked set to challenge 1.3400 sooner rather than later.

EUR/USD, meanwhile, left behind two daily pullbacks in a row and climbed to multi-day peaks near 1.1470 on Thursday, partially offsetting the sharp decline in place since June. The advance followed an intense retracement in the US Dollar, sponsored by disheartening June Payrolls prints and a sharp sell-off in USD/JPY. US markets will be closed on Friday for the Independence Day holiday.

## Gold keeps its shine
Gold extended its bullish momentum on Thursday, climbing above the $4,100 mark per troy ounce to reach its highest level in a week. The precious metal's sharp rebound came as the US Dollar retreated following the disappointing US NFP data.

## Suspense over the Fed's next move
Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find. For now, the uncertainty over the direction of policy is set to linger.

## What this means for you
- **For investors:** China's firm PMI alongside a weaker Dollar could support emerging-market currencies and gold, which may shift how your portfolio behaves.
- **For everyday buyers:** The EU's curbs on Chinese steel and small-parcel e-commerce could eventually affect the availability and pricing of cheap goods sourced from China.

## Questions & Answers

### 1. What was China's manufacturing PMI in June?
The private sector manufacturing PMI printed at 51.7 in June, a three-month low.

### 2. How did the figure compare with the estimate and the previous reading?
It edged past the 51.5 estimate but slipped marginally from the previous 51.8.

### 3. What does this PMI reading signify?
It sealed the strongest quarter for China's manufacturing sector in nearly six years.

### 4. Why are risks to exports growing?
According to Commerzbank, the accumulation of external trade friction is introducing new downside risks to export growth in the second half of the year.

### 5. What measures has the European Union introduced?
The EU recently introduced measures targeting Chinese steel imports and small-parcel e-commerce shipments.

### 6. How did gold move on Thursday?
Gold climbed above $4,100 per troy ounce to reach its highest level in a week.

### 7. Why did the Dollar come under pressure?
The Greenback faced renewed selling pressure following a softer-than-expected US NFP report for June.

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