China’s September PMI Signals Modest Factory-Sector Recovery Amid AI-Driven Upswing

On September 30, official manufacturing PMI data released by the National Bureau of Statistics rose to 50.1, up from 49.8 in August, ending two consecutive months of contraction. The sub-index for new orders reached 50.5 and production hit 51.7. A private survey by RatingDog reported a five-month high of 52.1. The non-manufacturing PMI also moved into expansionary territory at 50.2, up from 49.0 in August. These figures suggest a tentative rebound in factory activity, though analysts note the recovery remains uneven.

Reuters

The modest expansion occurs against a backdrop of a prolonged property slump that continues to suppress household consumption. Official data show China’s goods-trade surplus is on track to exceed $1 trillion for a second straight year, underscoring the economy’s reliance on exports to offset weak domestic demand. At the same time, manufacturers have benefited from a global AI hardware surge, which has lifted equipment and high-tech-related production.

Reuters

Beijing announced a “mini-stimulus” package on Tuesday, targeting cheaper credit for infrastructure, technology and small firms, and extending mortgage subsidies for qualified first-time home buyers (prices <= 1.5 million yuan and <= 120 m²). The People’s Bank of China also lowered the interest rate on a lending-support program and expanded its quota. Chinese and U.S. officials said on Monday they will pursue tariff cuts on $60 billion of bilateral goods, though several categories—such as U.S. soybeans—were excluded.

CNBC

• “China's fiscal push appears to be gaining traction, with September PMI data suggesting that the economy is shifting back into a higher gear,” — Hao Zhou, a Hong Kong-based economist at Guotai Haitong Securities

Reuters

• “China's K-shaped divergence this year has been quite striking,” — Lynn Song, chief Greater China economist at ING

Reuters