China’s Manufacturing Output Sees Modest Growth in August Amid Export Resilience, Private Survey Reveals

China’s manufacturing sector experienced modest growth in August, driven primarily by export demand, according to a private survey released Monday. The Caixin/S&P Global manufacturing Purchasing Managers’ Index (PMI) reached 50.4 for the month, indicating slight expansion. This figure surpassed the median estimate of 50.0 in a recent poll and represented a recovery from July’s contractionary reading of 49.8.

The Caixin PMI, which focuses on smaller and export-oriented companies, contrasted with the official PMI released earlier that showed a continued decline in manufacturing activity, hitting a six-month low of 49.1. The divergence between the two indicators underscores the resilience of export orders compared to weakening domestic consumption in China.

APAC economist Gary Ng noted that global demand for Chinese exports remains relatively strong, despite mounting geopolitical risks, providing temporary support to the country’s economy. However, Ng warned that sustaining this export-driven growth could be uncertain due to external pressures.

China’s economy has demonstrated resilience on the external front, thanks in part to its state-led structure, which allows the government to mobilize resources efficiently. However, the challenge lies in whether Beijing will prioritize short-term economic support amid a backdrop of long-term policy goals. With consumer sentiment and the troubled property market weighing on domestic demand, Ng highlighted the difficulty China faces in achieving its 5% GDP growth target for the year.

The Caixin PMI is regarded as an early indicator of economic trends in China, and August’s reading suggests a tenuous recovery in manufacturing. Nonetheless, China’s broader economic outlook remains clouded by internal challenges, including sluggish consumption, property sector troubles, and rising geopolitical risks.