China’s manufacturing sector has hit a rough patch that’s breaking records for all the wrong reasons. The official manufacturing PMI dropped to 49 in October 2025, marking the longest decline in more than nine years. Think of PMI like a report card for factories – anything below 50 means they’re struggling, and China’s factories have been getting failing grades for seven straight months.
China’s factories have been getting failing grades for seven straight months, breaking records for all the wrong reasons.
The situation got even more concerning when both official government surveys and private company surveys showed manufacturing was contracting in November. This rarely happens, kind of like when your parents and teachers both agree you need to study harder.
The output measure, which tracks how much stuff factories actually make, also fell into negative territory for the first time since April.
While factories struggled, other parts of the economy showed mixed signals. Construction and services managed to stay barely positive at 50.1 in October, though they too slipped into contraction by November. It’s like having one part of your school doing well in math while another part fails science completely.
Chinese families aren’t feeling confident either. Central bank surveys found that people became less willing to spend money during the third quarter, and more workers worried about losing their jobs. The housing market problems didn’t help matters, making families even more cautious with their wallets.
Surprisingly, exports kept growing throughout 2025, but for an unusual reason. Companies around the world were buying extra Chinese goods before expected tariffs kicked in, like stocking up on snacks before a price increase. However, after Trump and Xi Jinping reached a trade agreement in South Korea, this rush to buy early started cooling down. Market analysis reveals that export figures have shown strong growth rates despite domestic manufacturing challenges.
Beijing recognizes the challenges and has made technology and manufacturing top priorities. Officials promised “extraordinary measures” to boost innovation and core technology development. The government’s commitment includes plans to achieve breakthroughs in core technologies as part of their strategic response to economic pressures.
The government still expects to hit its 5 percent growth target for 2025, though the path forward looks bumpier than anticipated. Weather disruptions and holiday schedules added extra complications to an already challenging situation. Investors monitoring these developments can use CFD trading to speculate on currency and commodity price movements without owning the underlying assets.
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