China's economy growing at modest pace amid backdrop of trade tensions

Chinese riding bicycle pass by a local business building the in background in Beijing, China. Surveys of Chinese factory managers showed a mixed outlook for the world's second-largest economy in June

The latest surveys of Chinese factory managers have delivered a mixed outlook for the economic forecast in June, with the world's second-largest economy holding steady but not showing significant momentum.

The official purchasing managers index (PMI), released by the China Federation of Logistics and Purchasing, stayed put at 49.5, mirroring May's figure. This index measures up to 100, with the 50 mark separating growth from contraction.

"From the perspective of output, China's economy is maintaining expansion, but the momentum of recovery still needs to be consolidated," Zhao Qinghe, a senior statistician at the National Bureau of Statistics told the official Xinhua News Agency. In a slight dip, the PMI for new export orders nudged down to 49.4 from 49.6, potentially as a reaction to the EU and US announcing hikes in tariffs on Chinese electric vehicle imports.

Contrastingly, Caixin's private-sector survey, which came out Monday, painted a more positive picture, inching up to 51.8 from 51.7 the previous month. According to Caixin, this marks the quickest growth in factory activity in two years, defying analysts' expectations of a decline.

However, despite the upbeat results, Caixin reported that confidence among purchasing managers dropped to its lowest in over four-and-a-half years, driven by concerns about fierce competition and unpredictable market conditions. The surveys provided little insight into the effectiveness of various measures aimed at stimulating the property sector, such as reducing mortgage interest rates and down payments.

These measures were introduced in response to an industry-wide slump following a crackdown on excessive borrowing by developers. "The PMIs for June were mixed but on balance suggest that the recovery lost some momentum last month," Capital Economics stated in a report.

China is currently facing resistance over its electric vehicle exports, with fears that they could flood markets and harm domestic producers. The European Union and Canada are considering surtaxes on Chinese EVs which is the the source of some trade tensions.

In June, the official PMI reading for high-tech manufacturing increased to 52.3 from 50.7 in May. This reflects the government's efforts to encourage investment in factory and equipment upgrades in emerging industries like computer chip and electric vehicle production.

"This shows that the transformation and upgrading of China's manufacturing industry has continued to advance," Zhao was quoted as saying. Chinese leader Xi Jinping has prioritised the growth of such advanced industries, a topic likely to be a key focus at an upcoming meeting of top officials from the ruling Communist Party later this month.

Xinhua reported separately that during the meeting, the party will announce a new round of "deep and comprehensive reforms." Such measures will "chart the course forward for the world's second largest economy," it said.