China's factory activity contracts for a 6th straight month as trade tensions weigh on the economy
- - China's factory activity contracts for a 6th straight month as trade tensions weigh on the economy
CHAN HO-HIMSeptember 30, 2025 at 5:09 AM
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Workers transfer materials at a construction site for a new pedestrian overhead bridge, at the Shenzhen Bay commercial district, in Shenzhen, China's Guangdong province, Friday, Sept. 19, 2025. (AP Photo/Andy Wong)
HONG KONG (AP) — China's factory activity shrank for a sixth straight month in September, the longest slump since 2019, an official report said Tuesday.
The official manufacturing purchasing managers index, or PMI, improved to 49.8 from 49.4 in August. But it remained below the 50-cutoff level between contraction and expansion on a scale of 0 to 100.
A private sector PMI survey by the credit research and rating startup RatingDog was more upbeat, with September’s overall PMI rising to 51.2 from 50.5 in August.
The mixed manufacturing measures reflect persisting sluggish domestic demand and uncertainties over trade tensions with the United States.
More detailed data measuring new orders and production saw month-on-month improvements.
“The September PMI reads from China offered a picture that looked less like a coherent growth engine and more like a car with one cylinder firing while another misfires,” Stephen Innes of SPI Asset Management said in a commentary
Companies are under pressure from price cutting amid rough competition, he said.
“Factories are moving more goods, but they’re being forced to do it at thinner margins, like street vendors selling more bowls of noodles at half price just to keep the crowd coming,” Innes said.
The latest data show China’s economy is gaining momentum, with output accelerating slightly, said National Bureau of Statistics chief statistician Huo Lihui.
China’s official manufacturing PMIs first slipped back into contraction in April as trade friction with U.S. President Donald Trump's administration heated up after he took office.
The two sides are still slowly working their way toward a broad trade agreement after exchanging threats of sky-high tariffs on each others' exports.
A pause in steep U.S. tariff hikes on China has been extended until November, while a Sept. 19 phone call between Trump and Chinese leader Xi Jinping offered glimmers of hope for improving relations.
A truce hinges largely on a widely anticipated U.S. proposal for transferring ownership of TikTok to a U.S. company from its Chinese owner ByteDance. That would also require Beijing’s approval.
A face-to-face meeting between Trump and Xi is set for the end of October in South Korea on the sidelines of an annual summit of the Asia-Pacific Economic Cooperation forum.
China's economy has remained in the doldrums, bogged down by a prolonged slump in the property sector, elevated unemployment and weak household spending.
Some economists are hoping that a rate cut by China’s central bank by the end of the year could help encourage more spending and investment. This month, the People’s Bank of China left its key lending rates unchanged following the U.S. Federal Reserve’s rate cut for the first time this year.
Source: “AOL Politics”
