China's Manufacturing PMI Rebounds Reflect Industrial Strength and Weaknesses

In September, China registered a rebound in its official manufacturing Purchasing Managers' Index (PMI) to 50.1 after two consecutive months of contraction. This reading, coupled with a surge in the non-manufacturing PMI at 50.2, provided a positive note ahead of the national holiday. However, the official figures remain close to the 50-line threshold, suggesting that domestic demand is still weak and putting pressure on Beijing for further support measures. The robust recovery was driven by improved weather conditions and the global boom in artificial intelligence (AI), which benefited the industrial sector, particularly metals and oil. Nevertheless, the local economy continues to face challenges such as weak retail sales and investment growth. Recent government measures aim to channel cheaper credit into strategic sectors like infrastructure and technology, despite competition from private-sector PMIs that indicated even stronger performance.