China issues travel warning
After levying tariffs, selling Treasury securities, and threatening the US with a ban on rare earth exports, China tried a new measure in the trade war yesterday. China issued a travel advisory to Chinese tourists traveling to the US. China’s Ministry of Culture and Tourism warned its citizens against going to the US due to security threats such as shootings and robberies. China’s foreign ministry also accused US agencies of harassing its citizen through interrogations. Apart from affecting the travel industry, a drop in Chinese tourists may hamper luxury retail as Chinese tourists are known to buy luxury goods.
Chinese services PMI
Today, Caixin and IHS Markit released China’s services PMI for May. May’s services PMI dropped to a three-month low of 52.7 from April’s 54.5. Analysts were expecting services PMI to be 54.3. A PMI reading above 50 suggests an expansion while a reading below 50 suggests a contraction. Thus, China’s service sector continues to expand, albeit at a slower pace.
Chinese Indexes and ETFs
China’s Shanghai Composite Index remained almost steady today. The tech-focused Shenzhen Component also remained unchanged today.
Yesterday, the KraneShares CSI China Internet ETF (KWEB) gained 1.72% on the NYSE Arca, riding on the bull market. Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) and the iShares China Large-Cap ETF (FXI) lost 0.3% and 0.37%, respectively. The iShares MSCI China ETF (MCHI) remained steady.