Official data shows manufacturing and services activity shrinking, with policymakers favoring faster implementation of existing measures over new stimulus.
China’s official PMI data fell back into contraction territory for both manufacturing and non-manufacturing sectors, signaling renewed economic weakness. Domestic demand remains soft, with policymakers opting to accelerate existing measures rather than introduce fresh stimulus, according to recent assessments.
The latest figures contrast with earlier expectations, as growth is projected to drift below Beijing’s 4.5%-5.0% target range, settling around 4.5% in 2026 and 4.2% by 2027. Weak consumer demand, declining foreign direct investment, and industrial overcapacity continue to weigh on activity, despite record trade surpluses.
Analysts warn that reliance on exports is unsustainable, with a shift toward consumption-driven growth likely to be gradual and challenging. The transition may further strain an already fragile economic recovery.