Factory activity in June picks up pace

PMI still below 50 amid headwinds; calls emerge for counter-cyclical moves

Contraction in China's factory activity slowed in June while the non-manufacturing sector continued to expand, official data showed on Friday, as the world's second-largest economy sustained recovery trends.

Experts said while the factory activity edged up — the purchasing managers index rose to 49 in June from 48.8 in May — on improved production and stronger demand, the fact that the PMI still remains in the contraction zone indicates the risk of a downward spiral amid still-weak domestic demand.

They called for more efforts to further consolidate the recovery trend, including short-term stimulus measures for expanding domestic demand and long-term solutions to deal with structural issues embedded in the broader economy.