Chinese factories kept shrinking in October. It’s been seven months now. Fresh numbers came out Friday showing overseas orders took a dive after companies stopped rushing shipments to beat Trump’s tariffs.
The official purchasing managers’ index fell to 49.0 last month from 49.8 in September. That’s the lowest it’s been in six months. Anything under 50 means things are getting worse, not better. Economists polled by Reuters thought it would come in at 49.6, so this missed the mark.
The National Bureau of Statistics put out the data. It shows Chinese manufacturers are having a rough time even after they shipped extra products early in the year. Officials were counting on factories sending more stuff to America in the first nine months of 2025 to make up for weak buying at home.
Experts warned this wouldn’t work long-term. It was basically borrowing from future sales to make things look stable now. China’s the world’s second-biggest economy. America’s still the top buyer globally.
Searching for new buyers, losing money
Factory owners are trying to sell in Europe, Latin America, the Middle East and Africa. Problem is, none of these places can replace what America used to buy – around $400 billion in goods. A lot of manufacturers are selling at a loss now because they’ve got nowhere else to turn.
“Given that we are actually seeking a bit more stimulus in the fourth quarter – investment driven by policy financing tools and new government bonds. I am a bit surprised by the drop in the PMI reading this month,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. Exports were the big drag this month, he said. Looks like payback for all that earlier front-loading.
Losing the U.S. market cut export growth by about 2 percentage points. That’s roughly 0.3 percent of total economic output.
Now officials are watching to see if the $19 trillion economy can hit its 5 percent growth target for 2025 without pumping in more support.
Non-manufacturing did a bit better – up to 50.1 from 50.0 in September. Services went from 50.1 to 50.2. But construction dropped to 49.1 from 49.3.
Trade deal won’t fix much
“Some of this weakness may reverse in the near-term, but any boost to exports from the latest U.S.-China trade ‘deal’ is likely to be modest and wider headwinds to growth will persist,” said Zichun Huang at Capital Economics.
As reported by Cryptopolitan Trump and Xi made a deal Thursday to calm things down. They’re pushing back tariffs for a year. But it doesn’t fix the deeper problems between the two countries. Chinese officials still need to help manufacturers get back on their feet and stop property prices from falling.
Third quarter growth was 4.8 percent – the slowest in a year. The country’s on track to meet its roughly 5 percent target for this year, but it raises questions about relying so much on foreign buyers.
The ruling Communist Party said last week it wants people to spend more money. It also wants to make the industrial sector stronger.
But analysts aren’t sure if officials have anything new or if they’re just doing what they always do – giving money to big firms while regular businesses and families get passed over.
Some think no more stimulus is needed this year. Others say infrastructure spending would help the economy stay on target through the fourth quarter.
There’s still deflation problems and people aren’t spending enough compared to other countries around the world.
“The stimulus will be just enough to reach the full-year target, and to not make any indicators look too bad leading up to the beginning of the fifteenth five-year plan period,” said Dan Wang at Eurasia Group.
Analysts think the private-sector RatingDog PMI will hit 50.9 on Monday, down from 51.2 last month.
Chinese manufacturers face real questions about switching from exports to domestic sales. Industrial profits are all over the place and trade tensions aren’t going away. The road ahead looks bumpy for the world’s second-largest economy.
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