HONG KONG (AP) — China’s factory activity contracted for the seventh consecutive month in October, the government said Friday, as a newly announced truce in the trade war between the U.S. and China offers some hope for a stronger recovery in exports.

The official manufacturing purchasing managers index slipped to 49 in October from 49.8 in September, worse than forecast, the China’s National Bureau of Statistics reported, based on a survey of factory managers.

Measured on a scale between 0 and 100, a PMI reading below 50 indicates contraction.

On Thursday, U.S. President Donald Trump said the U.S. will cut its fentanyl-related tariffs on China from 20% to 10% after his meeting in South Korea with Chinese leader Xi Jinping, bringing down U.S. tariffs on Chinese goods from 57% to 47%.

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