A private survey revealed that China’s manufacturing activity unexpectedly contracted in May to 48.3 in May 2025, down from April’s 50.4 and missing forecasts of 50.6, marking the first contraction in the sector in eight months,

China has grappled with entrenched deflationary pressure, as a prolonged real estate downturn and job insecurity hampered investment, consumer spending.

China’s factory activity contracted in May although the decline slowed from April as the country reached a deal with the U.S. to slash President Trump’s sky-high tariffs.