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Alice Li

China’s factory activity returned to expansionary territory in June, supported by strong exports, while other data signalled that domestic demand continued to show weakness.
The official manufacturing purchasing managers’ index (PMI) – an indicator of factory activity – rose to 50.3 in June from 50.0 in the previous month, according to data released on Tuesday by the National Bureau of Statistics (NBS).
The reading slightly beat the 50.03 projection by Chinese financial data provider Wind.
Using survey data from supply chain managers across various sectors, the monthly index indicates that factory activity is expanding when the reading is above 50 and contracting when it is below 50.
“Production activity expanded at a faster pace [in June] … and market demand showed some improvement,” said Huo Lihui, chief statistician at the NBS service industry survey centre in a statement.
The new orders subindex, which tracks manufacturing demand, returned to expansion territory at 51.2 in June, up from 49.9 in May.
The PMI for high-technology manufacturing was 53.5 in June, an improvement from May and “significantly higher than the overall manufacturing sector”, Huo said in the statement.

Meanwhile, new export orders also improved, with the subindex rising to 50.1 from 48.6 in May.
“The manufacturing industry is stable thanks to support from the exporters,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.
The world’s second-largest economy registered robust trade growth this year, with May exports skyrocketing 19.4 per cent year on year. But it continues to face weak domestic demand, as a struggling property sector and a soft labour market have led to households tightening their belts.
Gary Ng, senior Asia-Pacific economist at French investment bank Natixis, said that despite a stabilised month-on-month PMI, pressures persist because the service sector – expected to drive growth – showed limited improvement amid the ongoing contraction in construction projects.
“The economic momentum is now heavily geared towards the tech sector, which is the core policy focus,” Ng said.
China’s non-manufacturing PMI, which measures activity in the construction and services sectors, came in at 50.2 in June, a slight improvement from 50.1 in May, NBS data showed.
The ex-factory price index, which reflects changes in the selling prices of manufactured goods, posted “a surprise” move back into contraction territory at 48.2, according to Lynn Song, ING’s chief economist for Greater China.
“We’ve seen a reflation trend so far this year, further supported by higher input prices from the war in Iran. But these early signs could indicate that the spectre of deflation hasn’t been vanquished quite yet,” Song said.
In May, China’s retail sales – a key gauge of consumer spending – logged the first decline since Beijing ended its Covid-19 lockdown in late 2022, falling by 0.6 per cent year on year.
Additional reporting by Ralph Jennings


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The world’s second-largest economy registered robust trade growth this year, with May exports skyrocketing 19.4 per cent year on year


The world’s second-largest economy registered robust trade growth this year, with May exports skyrocketing 19.4 per cent year on year.


China’s factory activity returns to expansion in June but weak domestic demand lingers

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The world’s second-largest economy registered robust trade growth this year, with May exports skyrocketing 19.4 per cent year on year

The world’s second-largest economy registered robust trade growth this year, with May exports skyrocketing 19.4 per cent year on year