HONG KONG, Aug. 31 (Xinhua) — After five consecutive months of contraction, China’s manufacturing sector saw a notable incremental improvement in August, with key indicators coming in better than market forecasts, lifted by unexpectedly strong global demand for Chinese exports, official data released Monday shows.
According to the National Bureau of Statistics (NBS), China’s official manufacturing Purchasing Managers’ Index (PMI) — a closely watched gauge of factory activity — edged up to 49.8 in August from July’s reading of 49.2. While the figure remains below the 50-point threshold that separates expansion from contraction, it outperformed the median expectation of 49.3 from a survey of economists by major financial news outlets.
The monthly PMI survey tracks a broad range of manufacturing metrics, and several key sub-indexes moved back into expansion territory in August, signaling broad-based improvement across the sector. The production sub-index rose to 50.4 from 49.1 in July, while the overall new orders sub-index climbed to 50.6 from 48.5. Most notably, the new export orders sub-index improved to 50.1 from July’s 49.6, crossing into expansion for the first time in three months and confirming solid global demand for Chinese goods.
“Manufacturing activity rebounded thanks to strong export demand,” Nguyen Hoang Nam, a China economist at London-based independent research firm Capital Economics, wrote in a Monday research note. Huo Lihui, chief statistician at the NBS, also noted in an official statement that the August PMI results reflect broad incremental improvement across China’s overall economy.
This latest uptick in factory activity aligns with recent export data that shows Chinese shipments have maintained double-digit growth through the first half of the year. Chinese exports surged nearly 24% year-on-year in July, following an 18% overall expansion across the first seven months of 2025. Multiple drivers are behind this strong export performance, economists say.
First, the global boom in artificial intelligence development has spurred massive demand for high-tech Chinese exports, particularly semiconductors and related manufacturing components. Second, sustained elevated global energy prices stemming from ongoing geopolitical tensions in the Middle East, including the Iran conflict, have accelerated global adoption of electric vehicles, and Chinese EV manufacturers have captured a growing share of the growing global market. Third, demand for other green technology products, including solar panels and wind turbine components, has continued to accelerate this year after strong growth in 2024, adding further momentum to export gains.
“Demand for green technologies was already accelerating last year and has continued to strengthen, providing an important additional boost to Chinese exports so far this year,” said Max Zenglein, senior economist for Asia Pacific at business research organization The Conference Board.
Trade flows have also shifted in recent months, following the return of former U.S. President Donald Trump to the White House last year and the reimposition of broad punitive tariffs on Chinese goods. U.S.-China trade has declined as a result, but Chinese exporters have expanded market share in other regions, particularly the European Union and Southeast Asia, offsetting much of the lost sales to the U.S.
Trade tensions between the two world’s largest economies are expected to be a top agenda item when Trump meets Chinese President Xi Jinping for high-level talks scheduled for late September, according to officials from both sides.
Despite the bright spot of strong export growth, China’s economy still faces significant headwinds that are holding back broader expansion. Persistently sluggish domestic demand, driven largely by a years-long protracted slump in the country’s property sector, continues to weigh on overall economic growth. In the second quarter of 2025, China’s annual GDP growth came in at 4.3%, the slowest pace recorded in more than three years.