Manufacturing Sector - The manufacturing PMI for October 2025 is reported at 49.0%, a significant decrease of 0.8 percentage points from the previous month, which is notably higher than the seasonal average decline of 0.4 percentage points observed from 2020 to 2024[2][5] - The production index fell by 2.2 percentage points to 49.7%, while the new orders index decreased by 0.9 percentage points to 48.8%[5][15] - The new export orders index dropped to 45.9%, down 1.9 percentage points, marking the second-lowest level since the introduction of high tariffs in April 2025[5][20] - Small enterprises experienced a notable decline in PMI, falling 1.1 percentage points to 47.1%, while large enterprises' PMI decreased to 49.9%[6] Non-Manufacturing Sector - The non-manufacturing PMI for October 2025 is at 50.1%, slightly up from 50.0% in the previous month, driven by holiday consumption[2][28] - The service sector showed improvement, with indices for transportation, retail, and entertainment exceeding 60%, indicating strong performance in consumer-related services[28] - The construction PMI fell to 49.1%, but new orders and business activity expectations increased, suggesting a potential recovery in infrastructure activities[34] Economic Outlook - The report highlights that the construction sector may benefit from the introduction of 500 billion yuan in new policy financial tools and an additional 200 billion yuan in special bond issuance, which could support infrastructure investment[4][34] - The overall economic environment remains cautious due to external trade uncertainties and domestic demand stability, particularly in high-energy-consuming industries[16][20]

Core Insights - The manufacturing PMI in China rose to 49.8% in September, indicating a slight recovery but still below the expansion threshold [1] - The non-manufacturing business activity index decreased to 50.0%, reflecting a slight slowdown in non-manufacturing activities [1] Manufacturing Sector - The manufacturing production index increased to 51.9%, marking a continuous expansion for five months [4] - The purchasing volume index rose to 51.6%, indicating improved procurement activities [4] - New orders index reached 49.7%, showing a stabilization in market demand [4] - The export new orders index improved to 47.8%, suggesting a narrowing decline in export demand [4] - The manufacturing purchase price index was 53.2%, while the factory price index fell to 48.2%, indicating mixed price trends across sectors [5] Non-Manufacturing Sector - The non-manufacturing business activity index remained stable at 50.0%, with the construction index at 49.3% and the services index at 50.1% [8] - The business activity expectation index for non-manufacturing remained above 55%, indicating stable optimism among enterprises [8] - The postal industry showed significant growth, with indices above 60%, reflecting active online shopping [8][9] Future Outlook - The manufacturing sector is expected to see continued growth in Q4, driven by macro policies and seasonal demand [5] - Non-manufacturing activities are anticipated to stabilize and recover, supported by year-end effects and holiday demand [10]

Core Viewpoint - The economic climate in China is showing signs of recovery due to the easing of extreme weather conditions and the implementation of policies aimed at stabilizing the economy and employment [3][4]. Manufacturing Sector - The manufacturing Purchasing Managers' Index (PMI) for August is reported at 49.4%, a slight increase of 0.1 percentage points from the previous month, indicating a modest improvement in manufacturing sentiment [3][6]. - The new orders index within the manufacturing PMI is at 49.5%, also up by 0.1 percentage points, while the production index has risen to 50.8%, reflecting a stable expansion in production activities [6][8]. - The prices of raw materials have increased, with the purchasing price index at 53.3%, up 1.8 percentage points, marking three consecutive months of growth [6][7]. - Large enterprises continue to show stable expansion with a PMI of 50.8%, while small enterprises have shown signs of recovery with a PMI of 46.6%, indicating a narrowing decline in supply and demand [8][9]. Non-Manufacturing Sector - The non-manufacturing business activity index stands at 50.3%, up 0.2 percentage points, indicating ongoing expansion in this sector [12]. - The service sector's business activity index has reached 50.5%, the highest point this year, with certain industries like capital market services and transportation showing strong performance [13]. - Despite some sectors like retail and real estate remaining below the critical point, the overall sentiment in the service industry is optimistic, with a business activity expectation index of 57.0% [13][14]. Economic Outlook - Experts predict that the positive factors accumulating in the market will lead to continued economic recovery in September and the fourth quarter, with stable demand and production activities in the manufacturing sector [9][14].

Summary of Key Points Core Viewpoint - In August, China's manufacturing sector showed slight improvement in economic sentiment, while non-manufacturing activities accelerated expansion, indicating a general trend of economic growth [1][2]. Manufacturing Sector - The Manufacturing Purchasing Managers' Index (PMI) rose to 49.4%, an increase of 0.1 percentage points from the previous month, indicating a slight improvement in manufacturing sentiment [3][5]. - The production index and new orders index both showed recovery, with the production index at 50.8%, up 0.3 percentage points, suggesting accelerated manufacturing production [5][7]. - The new orders index improved to 49.5%, reflecting a slight enhancement in market demand [5][6]. - Large enterprises reported a PMI of 50.8%, while medium and small enterprises had PMIs of 48.9% and 46.6%, respectively, indicating varying levels of economic activity across different enterprise sizes [5]. Non-Manufacturing Sector - The Non-Manufacturing Business Activity Index increased to 50.3%, up 0.2 percentage points, indicating continued expansion in the non-manufacturing sector [1][18]. - The service sector's business activity index reached 50.5%, marking a year-to-date high, with significant growth in sectors like capital market services and transportation [2][13]. - The construction sector's business activity index fell to 49.1%, indicating a decline in activity [13][16]. Price Indices - The main raw material purchase price index rose to 53.3%, and the factory price index increased to 49.1%, both showing a continuous upward trend for three months [1][2]. - The input price index for non-manufacturing remained stable at 50.3%, indicating a general increase in operational costs [16]. Future Expectations - The production and business activity expectation index for manufacturing was reported at 53.7%, suggesting increased confidence among manufacturers regarding future market conditions [2][17]. - The business activity expectation index for non-manufacturing reached 56.2%, indicating optimism about market prospects [17][18].

Group 1 - The manufacturing Purchasing Managers' Index (PMI) for August is 49.4%, showing a slight increase of 0.1 percentage points from the previous month, indicating an improvement in manufacturing sentiment [1][2] - The production index stands at 50.8%, up 0.3 percentage points, marking the fourth consecutive month above the critical point, suggesting accelerated manufacturing production [1] - The new orders index is at 49.5%, reflecting a 0.1 percentage point increase, with significant performance in sectors like pharmaceuticals and computer communication electronics, while textiles and furniture industries remain below the critical point [1] Group 2 - The price index has been rising, with the main raw material purchase price index at 53.3% and the factory price index at 49.1%, both showing increases of 1.8 and 0.8 percentage points respectively, indicating an overall improvement in manufacturing market prices [1] - High-tech manufacturing PMI is at 51.9% and equipment manufacturing PMI is at 50.5%, both showing increases, which indicates sustained support and leading roles in the manufacturing sector [2] - The production and business activity expectation index is at 53.7%, up 1.1 percentage points, suggesting increased confidence among manufacturing enterprises regarding future market conditions [2]

Group 1 - Manufacturing PMI has risen for two consecutive months, indicating a continued recovery in China's macro economy [5] - In June, the manufacturing PMI increased to 49.7%, with 11 out of 21 surveyed industries in the expansion zone, reflecting an improvement in manufacturing sentiment [6] - The new orders index returned to the expansion zone at 50.2%, indicating a recovery in market demand [6] Group 2 - The price index ended a three-month decline, with the main raw material purchase price index at 48.4% and the factory price index at 46.2%, both showing improvement [7] - Large enterprises' PMI rose to 51.2%, significantly supporting the overall manufacturing sector, while small enterprises' PMI fell to 47.3% [7] - The manufacturing sector is expected to maintain steady growth in the second half of the year, driven by policy support and stable market demand [7] Group 3 - The non-manufacturing business activity index was at 50.5%, indicating continued expansion in the service sector [10] - The service sector's business activity index was 50.1%, showing stability, while the business activity expectation index was at 56.0%, reflecting optimism for future growth [10] - The construction business activity index rose to 52.8%, with civil engineering construction remaining robust [11] Group 4 - Infrastructure projects are progressing rapidly, supported by special bonds for land acquisition and government investment funds [11] - The expansion of special bond allocations is expected to stimulate more infrastructure demand, contributing to stable economic growth [11]