China Manufacturing Official PMI Contracts Sixth Month Despite Improvement

China's manufacturing sector in September 2025 showed conflicting signals from different surveys, reflecting ongoing economic challenges. The official Purchasing Managers' Index (PMI) released by the National Bureau of Statistics indicated a contraction for the sixth consecutive month, with a reading of 49.8, slightly better than expectations but still below the 50-point threshold that separates expansion from contraction, signaling persistent weakness in domestic and international demand. In contrast, the private sector survey by RatingDog reported a manufacturing PMI of 51.2, suggesting expansion driven by improved new orders, promotional efforts, and the first increase in new export orders since March, highlighting a faster rise in production and rebuilding of inventories. The divergence between the official and private PMIs may be attributed to their differing coverage, with the official survey focusing on large state-owned firms and the private survey on smaller enterprises, which might experience different economic conditions. Despite these mixed signals, broader economic pressures are evident, with subdued domestic demand, global trade disruptions, and efforts by Beijing to control industrial overcapacity influencing the sector's performance. Overall, while some recovery signs appear in private manufacturing activity, China's industrial sector continues to face headwinds amid a complex economic environment.