"Downward pressure on the economy is still relatively prominent," said economist Zhang Liqun in a statement by the federation. Chinese exporters have been battered by President Donald Trump's tariff hikes in a fight over Beijing's technology ambitions. Domestic consumer demand has been chilled by tighter government controls on bank lending to cool a rise in debt.
Trump and Chinese President Xi Jinping agreed Saturday to hold more talks on their trade dispute but gave no indication of progress on disagreements that caused negotiations to break down in May. Measures of exports, new orders and employment all declined, according to the federation. It said business confidence is "not strong."
Beijing has tried to shore up slowing economic growth by increasing government spending and rolling back lending controls. Forecasters had expected the decline to bottom out late last year but pushed back that timeline after the trade fight with Trump erupted.