Employees will pack online Chinese e-commerce company Temu into a clothing factory in Guangzhou, Guangdong Province, southern China on April 16, 2025.
Jade Gao | AFP | Getty Images
China’s manufacturing activities returned to unexpected growth in August, behind the recovery of new orders and export operations, a private investigation presented on Monday due to an extended trade war ceasefire with the US has been shown
The purchasing manager index for RatingDog manufacturing is 50.5, abruptly breaking the 49.7 estimate from economists voted by Reuters.
The gauge showed its fastest expansion rate since March, rebounding from 49.5 in July. Readings below 50 indicate contraction, while one above that threshold suggests expansion.
Zichun Huang, Chinese economist at Capital Economics, shows that the improvements indicate “resilience of external demand in the face of tariffs” due to the recovery of new export orders. Overall production and profits from new orders have been reduced, with “there is little improvement in domestic demand,” Huang added.
Average raw material costs rose at the fastest pace in nine months, prompting some businesses to hand over the higher costs to consumers. Research shows that the average selling price stabilized after an eight-month decline.
Beijing tried to curb excess capacity, and price wars were wiped out across the industrial sector, focusing on corporate revenue.
That said, the profit trend interpreted from PMI data shows only a small recovery and remains under pressure overall, Yao Yu, founder of RatingDog, said in a statement.
While overall business confidence has improved, employment in the manufacturing sector remains desolate, the survey suggests, as business owners are cautious about staffing and reduced employment for five months.
“The latest rise was similar to the breath of relief, not sustained gatherings,” Yu said, warning of a “potentially overstretched external order” in which domestic demand was sustained weaker, and a slow recovery in profits.
“The durability of the improvement depends on whether exports are truly stable and whether domestic demand can speed up the pace,” Yu added.
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The results of the private survey were even brighter than the official reading released on Sunday, with manufacturing activity shrinking for five months in August, down 49.4 compared to July’s 49.3.
The non-manufacturing work PMI index covering services and construction has expanded from 50.1 in the previous month to 50.3 in August.
Private research has tended to paint better pictures than official votes in the past few years behind stronger exports. The private survey covers small batches of over 500 predominantly export-oriented companies, while the official PMI examines a large sample of over 3,000 companies in the almost upstream sector.
China’s export growth has beaten expectations in recent months, driven primarily by a surge in shipments to Southeast Asia and European countries, but shipments to the US have declined for four months.
Chinese authorities have been tried by leaders of countries in Southeast Asia, Central Asia, Europe and Latin America in recent months to expand trade and investment ties as Washington’s tariff policies hit shipments to the US.
At an annual rally of foreign leaders, including Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, China President Xi Jinping, Tianjin’s Chinese President, urged members of Shanghai cooperative organisations to deepen trade and investment ties and reject the “cold war mentality.”
Earlier this month, Beijing and Washington extended an additional 90-day tariff ceasefire, keeping the sudden duties at bay and leviing tariffs of about 57.6% for Chinese products and 32.6% for American products.
