FX.co ★ China Factory Activity Unexpectedly Shrinks

The Caixin China General Manufacturing PMI experienced an unforeseen drop to 49.5 in July 2025, decreasing from 50.4 in June and not meeting market expectations of 50.2. This figure represents the second contraction in manufacturing activity within a span of three months, largely attributed to a significant reduction in new export orders. Production output was reduced as there was a more modest rise in new orders. Employment levels also decreased, influenced by a dip in production and consistent backlog levels. On the other hand, purchasing activity saw an increase in July, following two months of decline.