China’s Manufacturing PMI Dips on Export Weakness, Trade Deal May Aid Recovery

• PMI Reading: 50.6 in October, down from 51.2 in September and missing forecasts of 50.9.

• New export orders dropped at the fastest pace since May, linked to rising trade uncertainty.

• Factory employment grew at its highest rate since August 2023, with 650 manufacturers surveyed showing improved hiring trends in the second half of the month.

China Manufacturing PMI October 2025 shows 50.6 reading amid trade tensions. Explore how U.S.-China deal eases tariffs and boosts outlook. Get insights on global economic impacts and factory growth—read now for key updates.

What is the China Manufacturing PMI Reading for October?

China Manufacturing PMI for October came in at 50.6, according to the RatingDog China General Manufacturing PMI compiled by S&P Global, marking a slowdown from September’s 51.2—the strongest in six months. This figure fell short of economists’ expectations of 50.9 polled by Reuters, reflecting tempered expansion above the 50 no-change threshold. Survey respondents highlighted rising trade uncertainty as the main factor curbing new export orders, which declined at the steepest rate since May.

Both production and new business grew more slowly than in the prior month, contributing to manufacturer confidence reaching a six-month low. Firms expressed the least optimism about their 12-month outlook in six months. Despite these headwinds, the sector avoided contraction, buoyed by other supportive elements in the economy.

How Does the Private PMI Differ from Official Data?

The private PMI of 50.6 contrasts sharply with the official government reading of 49.0 released by the National Bureau of Statistics, which indicated contraction—the most pronounced in six months. Private surveys like the one from S&P Global tend to report stronger results because they emphasize export-oriented manufacturers, polling 650 firms in the month’s second half. In comparison, the official PMI surveys over 3,000 companies at month-end, capturing a broader domestic focus that may highlight softer internal demand.

This divergence has been consistent, with private gauges often painting a more resilient picture. For instance, data shows export-heavy sectors maintaining momentum even as overall activity cools. Dongming Xie, head of Asia macro research at OCBC Bank, anticipates a partial recovery in the coming months, driven by the recent U.S.-China trade truce extension and expected stabilization in export orders. He notes that easing trade frictions could help bridge the gap between private and official indicators, supporting a gradual uptick in manufacturing sentiment.

Supporting this view, historical trends indicate that trade-sensitive sectors rebound quickly post-agreement. The survey’s methodology ensures representation from key industries like electronics and machinery, where global demand plays a pivotal role. As China navigates these dynamics, the private PMI serves as an early signal for international trade flows, influencing forecasts for the world’s second-largest economy.

Frequently Asked Questions

What Caused the Sharp Decline in China’s Export Orders in October?

New export orders in China’s manufacturing sector fell at the fastest pace since May, primarily due to rising trade uncertainty ahead of the U.S.-China negotiations. Survey respondents from the S&P Global PMI cited concerns over potential tariff escalations and global supply chain disruptions as key factors. This slowdown impacted production levels, though the overall PMI remained in expansion territory at 50.6.

How Will the Recent U.S.-China Trade Deal Impact Manufacturing Growth?

The U.S.-China trade agreement, reached after meetings between Presidents Trump and Xi in South Korea, provides significant relief by halving U.S. fentanyl-related tariffs on Chinese goods to 10%, reducing the overall rate to about 47%. China has suspended rare earth export restrictions, and the U.S. paused further probes into key industries. This breathing room is expected to stabilize export orders and bolster manufacturer confidence over the next year.

Key Takeaways

• Modest Expansion Persists: The October PMI of 50.6 indicates ongoing growth above contraction levels, though below expectations, highlighting resilience in core manufacturing activities.
• Trade Uncertainty Weighs Heavy: Export orders’ steepest drop since May underscores the sector’s vulnerability to geopolitical tensions, with firms reporting subdued 12-month outlooks.
• Employment Offers Hope: Factory jobs increased for the first time since March, reaching the highest level since August 2023—monitor this trend for signs of broader recovery.

Conclusion

China’s manufacturing sector navigated a challenging October, with the China Manufacturing PMI at 50.6 reflecting slower expansion amid export declines and trade worries, contrasting the official 49.0 contraction reading. The recent U.S.-China deal, easing tariffs and pausing investigations, along with positive employment gains, signals potential stabilization. As Goldman Sachs upgrades its growth forecasts to 5% for this year and 4.8% in 2026, citing diversification to markets like Southeast Asia and Europe, the sector’s adaptability shines through. Watch for upcoming data to gauge if this truce fosters sustained manufacturing growth, offering optimism for global economic ties ahead.

The divergence between private and official PMIs underscores methodological differences, with export-focused surveys providing a brighter lens on international competitiveness. Manufacturers have shifted shipments, achieving 14.7% growth to Southeast Asia and 8.2% to the EU through September, offsetting double-digit U.S. declines since April. Overall exports rose 6.1% in the first three quarters, despite a 1.1% import dip, demonstrating strategic pivots amid pressures.

Yet, broader challenges persist: third-quarter GDP growth slowed to 4.8%, the weakest in a year, while fixed-asset investment fell 0.5% in the first nine months—the first decline since 2020. These factors compound manufacturing headwinds, emphasizing the need for policy support. OCBC Bank’s Dongming Xie highlights the trade truce’s role in export recovery, aligning with Goldman Sachs’ revised outlook that anticipates stimulus bolstering output.

The agreement’s details—U.S. tariff cuts, suspended rare earth curbs, and halted probes into maritime and shipbuilding—directly address pain points. China’s commitments to resume U.S. agricultural and energy purchases, plus dropping investigations into firms like Nvidia and Qualcomm, foster reciprocity. This framework could enhance supply chain reliability, indirectly supporting manufacturing by reducing uncertainty.

Looking forward, diversification efforts continue: African exports surged over 28%, cushioning U.S. market losses. As Beijing pushes manufacturing and exports, these trends may accelerate post-deal. For stakeholders, the October PMI serves as a benchmark, with employment gains hinting at labor market stabilization. Overall, while short-term softness prevails, structural shifts position China for rebound, contingent on sustained trade dialogue.