China’s manufacturing sector returned to growth in September, ending a two-month contraction streak. Official data from the National Bureau of Statistics showed the manufacturing purchasing managers’ index, or PMI, rising to 50.1 from 49.8 in August, matching the Reuters poll forecast.
A reading above 50 indicates expansion. NBS chief statistician Huo Lihui said the modest improvement was driven by faster activity in equipment manufacturing, high-tech-related manufacturing and consumer industries.
The non-manufacturing PMI also moved back into expansion territory, climbing to 50.2. Business activity improved in the services sector, while construction reached its highest level this year.
Chinese manufacturers have continued to benefit from the AI hardware boom, but weak domestic demand remains a major concern. Margins have also come under pressure from higher energy costs linked to the war in the Middle East.
Exports have been one of the few bright spots for China’s economy this year, but that support is showing signs of strain. Trading partners are raising concerns about excess manufacturing capacity and the country’s heavy reliance on foreign demand, while domestic consumption continues to lag.
On Tuesday, China’s top economic and financial policymakers announced targeted fiscal and monetary measures aimed at lowering financing costs and boosting central bank lending. Economists at Nomura said the package was not enough to lift growth meaningfully, while Goldman Sachs said the measures were more important as a policy signal than as a near-term growth impulse.
