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 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].