China's manufacturing Purchasing Managers' Index (PMI) rose to 49.5 in May, marking a 0.5-point increase from April, according to data from the National Bureau of Statistics. While remaining below the 50-point threshold separating contraction from expansion, the upward trend reflects stabilizing domestic demand and improved production activity. The production sub-index climbed to 50.7, signaling renewed momentum in key sectors like equipment manufacturing and high-tech industries.
Policy Measures Drive Growth
Proactive fiscal and monetary policies, including interest rate adjustments and reserve requirement ratio cuts by the People's Bank of China, have bolstered market confidence. The CPC Central Committee's emphasis on counter-cyclical adjustments has further supported economic stabilization. Meanwhile, easing trade tensions with the U.S. contributed to a rise in new export orders, underscoring the interconnectedness of global markets.
Non-Manufacturing Sector Maintains Expansion
The non-manufacturing business activity index held steady at 50.3, with the composite PMI output index rising to 50.4. Analysts highlight resilience in consumer goods manufacturing and services, though challenges persist in sustaining long-term demand. Improved expectations among enterprises, particularly large and small firms, suggest cautious optimism for Q3 growth.
Balancing Opportunities and Risks
While May's data points to gradual recovery, experts caution that external uncertainties and domestic structural reforms will shape China's economic trajectory. The sustained growth of high-tech sectors and stabilizing supply chains offer opportunities for global investors eyeing Asia's largest economy.
