China’s manufacturing activity returned to growth in September, with both official and private PMI surveys showing improvement as production rebounded from earlier weather disruptions and demand for artificial intelligence hardware increased. However, persistent weakness in consumer spending and property investment continues to challenge the broader recovery.
The official manufacturing purchasing managers’ index, published by the National Bureau of Statistics, climbed to 50.1 in September from 49.8 the prior month, ending two months of contraction and aligning with analysts’ expectations. Sub-indexes revealed new orders reached 50.5 and production reached 51.7, signaling broad-based improvement across the sector.
A private survey conducted by RatingDog similarly indicated strengthening conditions, recording its manufacturing PMI at 52.1, the highest in five months. Demand for AI-related hardware and other high-tech equipment was cited as a key driver, though the overall recovery in manufacturing remains fragile due to subdued domestic demand and the effects of an extended property market downturn.
To address these challenges, Chinese authorities introduced targeted policy measures on Tuesday, including expanded credit access for infrastructure, technology, and support for home buyers. The nation’s central bank lowered interest rates for certain lending programs to reduce borrowing costs and support first-time home purchases.
Analysts noted the recent measures are designed to maintain annual economic growth between 4.5% and 5%, in line with Beijing’s goal. Despite these initiatives, economists from both Nomura and Goldman Sachs suggested the scale of stimulus is relatively limited and may only provide modest, short-term support. The mortgage subsidy introduced is restricted to first-time home buyers for properties below 1.5 million yuan and 120 square meters.
September also saw the non-manufacturing PMI, which measures activity in services and construction, improve to 50.2 from 49.0 in August. Gains in the construction sector and continued strength in exports helped offset sluggish retail sales and investment. Exports remain a crucial pillar for China’s economy, though trade frictions and global uncertainties could pose headwinds in the coming months.
Recent economic data reflect ongoing concerns, with the nation’s gross domestic product rising 4.3% in the second quarter—its lowest rate in over three years. Chinese leaders have pledged to step up fiscal spending and implement fresh measures as needed to reinforce growth.
Notably, China and the United States agreed this week to reduce tariffs on $60 billion in bilateral trade, covering products such as U.S. corn and Chinese toys, while several sectors—such as non-seed soybeans—were left out of the agreement.
