A private survey revealed that China’s manufacturing activity unexpectedly contracted in May to 48.3 in May 2025, down from April’s 50.4 and missing forecasts of 50.6, marking the first contraction in the sector in eight months,

China has grappled with entrenched deflationary pressure, as a prolonged real estate downturn and job insecurity hampered investment, consumer spending.

Chinas factory activity contracted in May for the first time in eight months, signaling growing pressure from U.S. tariffs and weakening global demand. The Caixin/SP Global manufacturing PMI fell to 48.