In May 2025, China's manufacturing Purchasing Managers' Index (PMI) edged up to 49.5%, a 0.5 percentage point increase from April, though it remained in contraction territory (below the 50% threshold). Meanwhile, the services PMI stood at 50.3%, staying in expansionary territory but with slower growth.
Key Trends & Analysis:
1. Manufacturing Shows Modest Recovery, Yet Challenges Remain
◦ The production index rose to 50.7%, entering expansionary territory, indicating a rebound in manufacturing activity.
◦ New export orders climbed to 47.5%, benefiting from the U.S.-China trade truce (U.S. tariffs on Chinese goods dropped from 145% to 30%, while China’s retaliatory tariffs fell from 125% to 10%).
◦ However, overall new orders (49.8%) and employment (48.1%) remained below 50%, signaling persistent weak demand.
2. Services Sector Expansion Slows
◦ Boosted by the Labor Day holiday, tourism and catering industries performed well, but the new orders index (46.1%) stayed in contraction.
◦ The construction PMI dipped slightly to 51.0%, reflecting slower growth.
3. Divergence Between Large & Small Firms
◦ Large enterprises saw their PMI rebound to 50.7%, while small and medium-sized firms (SMEs) remained below 50%, highlighting an uneven recovery.
4. Policy Outlook
◦ Analysts suggest that while the trade truce has provided short-term relief for manufacturing, weak domestic demand remains a key challenge, calling for further stimulus measures.
For more details, refer to the full reports from China’s National Bureau of Statistics (NBS) or the China Federation of Logistics & Purchasing (CFLP).

(Note: This is a hypothetical economic update based on recent trends and policy expectations. Adjustments may be needed for real-time data.)
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