China’s manufacturing growth slowed more than expected in October, as weakening export demand and renewed trade tensions with the U.S. weighed on factory activity, according to a private survey released Monday.
The RatingDog China General Manufacturing PMI, compiled by S&P Global, eased to 50.6 in October from 51.2 in September — missing the 50.9 forecast from a Reuters poll. Although the index stayed above the 50-point threshold that signals expansion, it marked a clear loss of momentum.
The slowdown was driven primarily by a sharper decline in new export orders, which fell at their fastest rate since May amid what respondents described as “rising trade uncertainty.” Both new business and production grew at weaker paces, while confidence among manufacturers slipped to its lowest level in six months.
“When looking ahead to the next 12 months, firms were the least optimistic they’ve been since April,” the report noted.
However, there was a rare bright spot — the survey’s employment index showed the first rise in factory jobs since March, climbing to its highest reading since August 2023.
The private PMI results were stronger than the official government survey released last Friday, which showed a deeper contraction in manufacturing activity at 49.0, the lowest in half a year. Private surveys, which focus more on smaller, export-oriented companies, often show better resilience compared to official data that captures larger state-run manufacturers.
The RatingDog survey polls around 650 companies, gathering data during the second half of each month, whereas the official PMI covers more than 3,000 firms at the end of each month.
Economists expect a mild rebound in factory activity in the months ahead, helped by easing trade tensions. “With the U.S.-China truce in place and a gradual recovery in export orders, we expect the manufacturing PMI to edge higher,” said Dongming Xie, head of Asia macro research at OCBC Bank.
The two countries reached a temporary trade truce last week following talks between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea, helping to calm markets after months of escalating friction.
Under the agreement:
- The U.S. will reduce fentanyl-related tariffs on Chinese goods to 10% from 20%, lowering the overall tariff burden to approximately 47%.
- Washington will pause its Section 301 investigation into China’s maritime and logistics sectors and suspend enforcement of the “50% ownership rule” on exports.
- In return, Beijing will drop antitrust and anti-dumping probes into U.S. chipmakers such as Nvidia and Qualcomm, and resume purchases of American soybeans, energy, and other agricultural goods.
Encouraged by the deal, Goldman Sachs recently lifted its GDP forecast for China, expecting 5.0% growth in 2025 and 4.8% in 2026, citing renewed export momentum and stronger industrial output.
Despite this, China’s economy continues to face headwinds. GDP growth slowed to 4.8% in Q3, its weakest pace in a year. Fixed-asset investment, including property development, fell 0.5% in the first nine months of 2025 — the first drop since the pandemic-hit 2020.
Chinese exporters have been diversifying away from the U.S., with shipments to Southeast Asia up 14.7%, the EU rising 8.2%, and Africa jumping 28% this year through September. Overall exports grew 6.1% in the first three quarters, even as imports slipped 1.1%.
However, analysts warn that fading stimulus support, a struggling housing sector, and a high comparison base from late 2024 could weigh on fourth-quarter results. “The government’s subsidies have lost much of their impact, and the real estate downturn remains a drag,” said Neo Wang, China strategist at Evercore ISI.
“Growth will likely stay uneven until domestic demand firms up and the export rebound becomes more sustainable,” he added.
