China's manufacturing activity contracted for a third month in a row in July, official data showed Wednesday, amid a bruising trade war with the United States and slowing global demand.

Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade, damaging manufacturers in both countries.

The Purchasing Managers' Index (PMI), a gauge of Chinese factory conditions, came in at 49.7 for the month, slightly up from June's figure of 49.4, according to the National Bureau of Statistics (NBS).

The reading falls below the 50.0 mark separating expansion from contraction. Economists surveyed by Bloomberg had predicted a reading of 49.6.

"There are many positive changes going on in the manufacturing sector," said NBS analyst Zhao Qinghe in a statement, pointing to industries like tobacco, paper and IT equipment where activity expanded.

The new export and import orders sub-index rose from June but also remained in contraction territory.

Beijing has enacted massive tax cuts and tried to better funnel financing to small and medium sized companies in a bid to combat the slowdown.

The policies have "further reduced the burden on enterprises and played an important role in stabilising corporate confidence," Zhao said.

But while momentum picked up at large scale manufacturers during the month, it retreated at small- and medium-sized businesses.

Chinese and US trade negotiators met in Shanghai on Wednesday in a bid to bring an end to the year-long trade war.

The data "still appear consistent with a renewed slowdown in year-on-year growth in industrial output and broader economic activity," said Julian Evans-Pritchard of Capital Economics in a note.

"With the headwinds to growth from US tariffs, cooling global demand and tighter property controls likely to intensify, we continue to anticipate further monetary easing in the coming months," he added.

Panasonic Q1 net profit down on lower sales in China
Tokyo (AFP) July 31, 2019 - Japanese electronics giant Panasonic said on Wednesday its quarterly net profit fell more than 10 percent, partly due to weak sales in the Chinese market.

The firm reported net profit of 50 billion yen ($460 million) in the April-June period, down 13.2 percent from a year before, despite sales growth in automotive batteries overseas and housing-related businesses in Japan.

Sales dipped 5.9 percent to 1.9 trillion yen while operating profit plunged 43.6 percent to 56.4 billion yen.

"Operating profit decreased... due mainly to lower sales in China, costs related to development expenses in automotive solutions and sluggish sales of TVs," Panasonic said in a press release.

The company also said motor sales deteriorated due to "weakening demand for capital investments in China" and appliance sales fell owing to slower European demand for televisions and digital cameras.

The company left unchanged its full-year forecast of a 30 percent net profit drop to 200 billion yen.

It expects annual operating profit to fall 27.1 percent to 300 million yen on expected sales of 7.9 trillion yen, down 1.3 percent.

Panasonic is seen as a specialist in the battery sector and has already partnered up with electric vehicle innovator Tesla to operate a huge "gigafactory" in the United States.

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Bank of England notes its 325 years with trip back in time
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Some of the earliest surviving banknotes and a Cold War nuclear radiation calculator are among 325 historic objects unearthed by the Bank of England to celebrate its 325th anniversary. Britain's central bank is the second oldest in the world after that of Sweden, and its trip back through time means returning to the days when its banknotes were written by hand. Among the exhibits are a Pounds 40 note dating from 1702 - a huge sum at the time, worth more than Pounds 9,000 ($11,000, 10,000 euros) nowadays. ... read more