Core Viewpoint - In November, China's RatingDog manufacturing PMI dropped to 49.9, indicating a weak contraction in the manufacturing sector, below the expected 50.5 and previous value of 50.6 [1] Manufacturing Sector Performance - Both production and demand indicators showed a slowdown, nearing stagnation, with new export orders rebounding but failing to improve the overall low state of manufacturing [1] - The growth of new orders has nearly stalled, leading manufacturers to reduce workforce and procurement, while becoming more cautious in inventory management [1] Inventory and Pricing Trends - Both raw material and finished goods inventories have entered a contraction phase, with readings at their lowest in nearly three years; raw material inventory saw its first decline in seven months [1] - There is a divergence in pricing, with raw material prices increasing while finished goods prices are decreasing; rising metal prices are identified as a key factor for increased costs, although the rate of increase in raw material prices and decrease in finished goods prices has narrowed, continuing to pressure corporate profit margins [1] Employment and Future Outlook - The employment index has re-entered the contraction zone due to the slowdown in new order growth [1] - Overall, the November PMI indicates a shift from expansion to contraction in China's manufacturing sector; however, there may be a potential for a temporary boost in supply and demand towards the end of the year, with expectations of a weak expansion in December PMI [1]

Export Performance - In May 2025, exports increased by 4.8% year-on-year, down from 8.1% in the previous month[1] - Traditional consumer goods exports showed stabilization at low levels, with footwear, toys, luggage, and clothing down by -7.9%, -4.5%, -12.1%, and -0.5% respectively[5] - Mechanical and electrical products exports were strong, with an overall year-on-year growth of 8.1% in May 2025[5] Import Trends - Imports decreased by 3.4% year-on-year, worsening from a decline of 0.2% in the previous month[1] - Agricultural product imports rose significantly by 4%, driven by increased soybean imports from South America, while crude oil and natural gas imports fell by -19.4% and -17.1% respectively[5] Regional Export Dynamics - Exports to the US saw a significant decline of -34.5%, while exports to the EU, ASEAN, and other regions showed positive growth rates of 12%, 14.8%, and 6.2% respectively[5] - The reliance on Chinese imports for essential goods in the US remains high, with 46.8% classified as "just-in-time" goods[5] Future Outlook - New export orders are expected to reflect in June, as there is typically a one-month lag in the impact of new orders on export figures[5] - The potential impact of the new US customs system on indirect trade with China remains a point of interest, as non-US export growth remains robust[5]