China’s manufacturing sector showed signs of moderation in October, with overall factory activity slipping into contraction. However, high-tech and equipment manufacturing continued to expand, highlighting the growing role of emerging industries in supporting economic resilience.
According to data released by the National Bureau of Statistics on October 31, China’s official manufacturing Purchasing Managers’ Index (PMI) fell to 49.3 in October, down from 50.1 in September. A reading below 50 indicates contraction.
Huo Lihui, a statistician with the bureau, attributed the decline partly to demand brought forward ahead of the National Day holiday and fluctuations in the global economic environment.
Despite the overall slowdown, high-tech manufacturing remained a bright spot. Its PMI reached 51.3 in October, staying above the expansion threshold for the 21st consecutive month. Equipment manufacturing also maintained growth, with a PMI of 50.6.
Wen Tao, an analyst at the China Logistics Information Center, said that although manufacturing activity moderated, emerging growth drivers continued to provide stability, with production and demand in these industries remaining on an expansionary path.
The strength of high-tech manufacturing is also reflected in corporate performance. Zhongji InnoLight, a Chinese manufacturer of high-speed optical modules, reported that its net profit attributable to shareholders more than tripled year on year to 22.24 billion yuan in the first nine months of 2026. The company attributed its performance partly to strong demand for high-speed optical modules amid the global expansion of artificial intelligence infrastructure.
Meanwhile, manufacturers maintained relatively positive expectations for future business conditions. The subindex measuring production and business outlook stood at 53.4 in October, remaining above 53 for the ninth consecutive month.
However, challenges remain, particularly for smaller manufacturers. The new orders subindex declined for the second consecutive month, while the PMIs for medium-sized and small enterprises fell to 48.4 and 47.5, respectively, indicating continued pressure on business activity.
Economists believe that policy implementation will be important in supporting manufacturing growth in the coming months. Existing measures include expanding credit support for businesses and consumers, accelerating the issuance of special-purpose bonds and making greater use of local government debt quotas.
According to Li Xuhong, vice-president of the Beijing National Accounting Institute, interest subsidies introduced in August for working capital loans to micro, small and medium-sized private enterprises supported more than 1.8 trillion yuan in new lending over two months, helping ease financing pressures and support domestic demand.
Wen Bin, chief economist at China Minsheng Bank, said the policy focus is increasingly shifting toward improving the efficiency of existing financial resources and ensuring that support reaches the real economy.
With high-tech manufacturing maintaining steady expansion, these industries are expected to remain an important source of support for China’s manufacturing sector as policymakers work to strengthen domestic demand and stabilize economic activity.
