China’s manufacturing activity moderated slightly in May, reinforcing analysts’ calls for stronger policy measures to stimulate domestic demand and sustain economic momentum.
According to the National Bureau of Statistics, the official manufacturing Purchasing Managers’ Index (PMI) stood at 50.0 in May, down 0.3 percentage point from April but remaining at the threshold separating expansion from contraction.
The production subindex registered 51.2, staying in expansion territory, while the new orders index slipped to 49.9, signaling softer market demand. Analysts noted that the gap between production and new orders reflects continued strength in exports alongside a slower domestic demand recovery.
Despite headline moderation, structural upgrading remained evident. High-tech manufacturing posted a PMI of 52.9, and equipment manufacturing recorded 52.1, both outperforming the overall manufacturing sector. Notably, high-tech manufacturing has stayed above the expansion line for 16 consecutive months.
However, economists warned that export resilience may face increasing pressure amid global uncertainties, including geopolitical tensions in the Middle East. They suggested that additional countercyclical policy support may be needed in the second half of the year to stabilize real estate, accelerate infrastructure investment, and strengthen household consumption.
Experts also emphasized the importance of boosting private investment and reducing real interest rates to enhance endogenous growth momentum. Fiscal policy may need to ensure public spending grows faster than nominal GDP, while monetary easing could further support business expansion and housing demand.
Overall, the latest PMI data indicate stable but uneven recovery, with new growth drivers providing support while domestic demand remains the key area for policy reinforcement.
