Chinese manufacturing declines as export orders slow

The world’s second-largest economy is facing international pressure to adjust its trade practices amid a widening trade surplus with numerous countries.

Figures released on Saturday by the National Bureau of Statistics revealed that China’s official manufacturing purchasing managers’ index decreased to 49.3 in October. This is down from 50.1 in September and 49.8 in August.

The PMI, a monthly survey of businesses, uses a scale of 0 to 100. A score below 50 indicates contraction, while a score above 50 signals expansion.

Several key indicators also showed contraction in October, notably new export orders, which fell to 48.7 from 50.0 the previous month. The production subindex also dropped to 49.8, down from 51.7.

Chinese companies are increasing exports to meet demand as domestic consumption weakens, largely due to a prolonged downturn in the property sector.

However, an increasing number of China’s trading partners are voicing concerns about growing trade deficits, arguing that the influx of affordable Chinese goods is harming their domestic industries.

The European Union, comprised of 27 nations, has highlighted an unsustainable trade deficit with China, projecting it to reach $1.1 billion daily by 2025. The EU has implemented measures to rebalance trade, including an agreement with Beijing to limit imports of Chinese electric vehicles.

China has been expanding exports to Europe, Southeast Asia, and Latin America following the imposition of higher tariffs by the United States last year.

German President Frank-Walter Steinmeier, speaking at Beijing University on Thursday, acknowledged China’s need to protect its economy but cautioned against creating dependence on Chinese goods.

Steinmeier, who was visiting China, met with President Xi Jinping and Premier Li Qiang on Friday. Li Qiang stated China’s willingness to increase imports of high-quality products from Germany.

Some economists predict that China’s exports will remain strong for the remainder of the year, with the overall trade surplus potentially exceeding last year’s record of $1.2 trillion in 2026.

Trade discussions are anticipated during a meeting between U.S. President Donald Trump and Xi Jinping in mid-November, which is expected to take place during the Asia-Pacific Economic Cooperation summit in Shenzhen, China.