China’s Caixin manufacturing PMI for November

China’s manufacturing activity continued to expand among smaller manufacturers in November, signaling that the country’s recent stimulus efforts have already helped to lift certain sectors of its ailing economy, according to a private survey released Monday.

The Caixin/S&P Global manufacturing purchasing manager’s index came in at 51.5, beating the median estimate of 50.5 in a Reuters poll. This also marks the second month in a row that the official reading has stayed above the key 50 level, which separates growth from contraction. 

“Central to the latest advancement in manufacturing sector conditions was greater new business inflows,” said Caixin Insight Group’s senior economist Wang Zhe.

Chinese manufacturers saw incoming new orders rise at the fastest pace in more than three years, the private survey noted. “A renewed rise in export orders also supported the rise in overall new orders,” Wang said.

This private gauge comes after the official PMI data, released Saturday, also indicated that manufacturing activity in the country expanded to 50.3 in November from 50.1 in the previous month. The reading beat Reuters’ expectations of 50.2.

The Caixin survey tends to feature more small- and medium-sized firms as well as private sector companies, compared to the official PMI survey which typically polls large and state-owned firms.

“The uptick is an early sign of stabilization in China’s manufacturing sector supported by the hope of stimulus,” said Gary Ng, senior economist at Natixis. However, Ng highlighted that it is still important to assess the improvement in real estate and size of fiscal spending in the coming months.

“Better consumer and business sentiment will be needed to bring a more persisting rebound,” Ng told CNBC. “With fierce domestic competition and external geopolitical headwinds, price wars and tariffs can still be risks in 2025.”

China’s economy has shown some early signs of recovery following a slate of stimulus measures introduced from late September. The world’s second largest economy reported strong growth in October’s retail sales, which beat Reuters’ expectations.

However, investment in real estate for the January to October period fell by 10.3% from a year ago, and the country’s industrial profits also dropped by 10% in October compared to a year before, marking the third straight month of profits decline.

During a Politburo meeting in September, the country’s top leaders intensified efforts to boost growth by committing to increased fiscal spending and stabilizing the struggling property sector. The People’s Bank of China had lowered the reserve requirement ratio, or RRR, by 50 basis points to increase liquidity in the economy, reducing the amount of cash banks are required to keep in reserve.

Early November, China also unveiled a five-year plan worth 10 trillion yuan ($1.4 trillion) to tackle local government debt issues, while signaling that additional economic support would be provided next year. 

However, Donald Trump’s 2024 presidential win has raised concerns over increased tariffs on Chinese goods, which could dent its export sector.

“Ironically, the threat of us tariffs may actually be boosting orders for Chinese exports in the near term, because U.S. companies now are rushing to get their orders in ahead of those tariffs coming into force,” said Julian Evans Pritchard, head of China economics at Capital Economics.

“I think that’s also boosting the export sector, which is why we’re getting these stronger manufacturing PMI,” Prichard added.