China’s official reading of manufacturing activity in September contracted less than expected, with the Manufacturing Purchasing Managers’ Index (PMI) registering 49.8, according to the National Bureau of Statistics.
This figure surpassed market expectations of 49.6 from a Reuters poll and represents the highest level seen since March, even though it remains below the 50-point threshold that separates expansion from contraction. This comes as Beijing intensifies efforts to address challenges regarding industrial overcapacity.
The official manufacturing PMI has lingered beneath that 50-mark since April, with local producers contending with weak domestic consumption and increased U.S. tariffs, which have hindered China’s exports to the American market.
Meanwhile, an independent assessment from private firm RatingDog set September’s manufacturing PMI at 51.2, surpassing economists’ projections for 50.2 and representing the highest figure since May.
China’s official non-manufacturing PMI—including services and construction—slipped slightly to 52.9 from 53 the prior month. The RatingDog general services PMI also softened, moving to 50 from 50.3.
Over recent years, private surveys formerly managed by Caixin and S&P Global have tended to reflect a more optimistic outlook for China’s manufacturing sector, as they have tended to emphasize export-oriented enterprises.
In a related development, Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, noted that upcoming discussions within China’s Politburo in October could offer insights into Beijing’s policy response to the recent third-quarter slowdown.
Zhang explained the government may accept some second-half deceleration, as long as the full-year growth target of 5% remains attainable, since GDP growth was above the level in the year’s first half.
