In August 2025, China's official manufacturing Purchasing Managers' Index (PMI) registered 49.4, a slight improvement from July's 49.3, but still indicating contraction as it remained below the 50-point threshold. This figure fell short of economists' median estimate of 49.5. This continued slump in factory activity was attributed, in part, to a government crackdown on price wars, which dampened production despite extended trade truce with the US offering a potential boost to manufacturers.
Conversely, a private survey revealed an unexpected return to expansion for China's manufacturing sector in August 2025. The RatingDog China General Manufacturing Purchasing Managers' Index rose to 50.5, up from 49.5 in July. This figure surpassed all forecasts in a Bloomberg survey, where the median estimate was 49.8. This unexpected growth, however, was met with lingering questions about the overall strength of the Chinese economy, which was still facing pressures from tariffs and weak consumer confidence.
Looking ahead to 2026, China's factory activity presented a mixed picture. The official manufacturing PMI climbed to 50.3 in June 2026, indicating a rebound in momentum after slipping to 50 in May. However, a private survey (RatingDog) indicated that manufacturing activity grew less than expected in June 2026, falling modestly to 51.7 from 51.8 in May, and missing the median forecast of 52. By July 2026, the RatingDog China manufacturing purchasing managers index for export-oriented firms unexpectedly slowed to 50.9 from 51.7 in June, despite remaining in expansion territory for the eighth consecutive month.
