China's factory activity contracts for a 6th straight month as trade
tensions weigh on the economy
[September 30, 2025] By
CHAN HO-HIM
HONG KONG (AP) — China's factory activity shrank for a sixth straight
month in September, the longest slump since 2019, an official report
said Tuesday.
The official manufacturing purchasing managers index, or PMI, improved
to 49.8 from 49.4 in August. But it remained below the 50-cutoff level
between contraction and expansion on a scale of 0 to 100.
A private sector PMI survey by the credit research and rating startup
RatingDog was more upbeat, with September’s overall PMI rising to 51.2
from 50.5 in August.
The mixed manufacturing measures reflect persisting sluggish domestic
demand and uncertainties over trade tensions with the United States.
More detailed data measuring new orders and production saw
month-on-month improvements.
“The September PMI reads from China offered a picture that looked less
like a coherent growth engine and more like a car with one cylinder
firing while another misfires,” Stephen Innes of SPI Asset Management
said in a commentary
Companies are under pressure from price cutting amid rough competition,
he said.
“Factories are moving more goods, but they’re being forced to do it at
thinner margins, like street vendors selling more bowls of noodles at
half price just to keep the crowd coming,” Innes said.
The latest data show China’s economy is gaining momentum, with output
accelerating slightly, said National Bureau of Statistics chief
statistician Huo Lihui.
China’s official manufacturing PMIs first slipped back into contraction
in April as trade friction with U.S. President Donald Trump's
administration heated up after he took office.
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Visitors take a cart tour at a public park along the Shenzhen Bay
against the high-rise office buildings, some of which are under
construction, in Shenzhen, China's Guangdong province, Wednesday,
Sept. 17, 2025. (AP Photo/Andy Wong)
 The two sides are still slowly
working their way toward a broad trade agreement after exchanging
threats of sky-high tariffs on each others' exports.
A pause in steep U.S. tariff hikes on China has been extended until
November, while a Sept. 19 phone call between Trump and Chinese
leader Xi Jinping offered glimmers of hope for improving relations.
A truce hinges largely on a widely anticipated U.S. proposal for
transferring ownership of TikTok to a U.S. company from its Chinese
owner ByteDance. That would also require Beijing’s approval.
A face-to-face meeting between Trump and Xi is set for the end of
October in South Korea on the sidelines of an annual summit of the
Asia-Pacific Economic Cooperation forum.
China's economy has remained in the doldrums, bogged down by a
prolonged slump in the property sector, elevated unemployment and
weak household spending.
Some economists are hoping that a rate cut by China’s central bank
by the end of the year could help encourage more spending and
investment. This month, the People’s Bank of China left its key
lending rates unchanged following the U.S. Federal Reserve’s rate
cut for the first time this year.
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