China's Manufacturing Expansion Slows in October Amid Rising Trade Uncertainties

Export orders declined at the fastest rate since May

China's manufacturing sector expansion fell short of predictions in October, according to a private survey, heightening concerns about the economy's strength as year-end approaches.

The RatingDog China General Manufacturing Purchasing Managers' Index decreased to 50.6 from September's 51.2, as stated in a Monday release, barely maintaining position above the 50 threshold that separates growth from decline. Bloomberg's economist survey had forecast a median value of 50.7.

The PMI report revealed that new export orders fell at the most rapid pace since May, with manufacturers showing their lowest optimism in six months. The extended national holiday in October may have amplified the appearance of the slowdown.

"Increased trade uncertainty during October drove new export orders dramatically into contraction territory," stated Yao Yu, RatingDog's founder, in the announcement. "Production-wise, external environment uncertainties also slowed output growth."

October saw escalating tensions between the world's two largest economies regarding export controls, though this confrontation was temporarily resolved through an agreement reached last week between US President Donald Trump and Chinese President Xi Jinping.

While Chinese exporters welcome reduced US tariffs following the summit, they remain eager to diversify their exposure against potential future trade relationship challenges. Despite strong economic performance in the first half of 2025, China may experience declining momentum as export front-loading diminishes.

The official manufacturing PMI released last week indicated factory activity has decreased for the longest consecutive period in over nine years, sparking renewed calls for enhanced policy support.

The private sector indicator typically reflects conditions among smaller, more export-focused companies.

According to RatingDog's report, both new business and output expanded at slower rates compared to September, with manufacturers reducing their export prices for the first time since April.

Simultaneously, employment creation accelerated to its fastest pace in more than two years, which RatingDog attributed to "the continued increase in new work inflows."