China’s factory activity rebounds in June but weak domestic demand lingers

China’s factory activity returned to expansionary territory in June, supported by strong exports, while other data signalled that domestic demand continued to show weakness. The official manufacturing purchasing managers’ index (PMI) – an indicator of factory activity – rose to 50.3 in June from 50.0 in the previous month, according to data released on Tuesday by the National Bureau of Statistics (NBS). The reading slightly beat the 50.03 projection by Chinese financial data provider Wind. Using survey data from supply chain managers across various sectors, the monthly index indicates that factory activity is expanding when the reading is above 50 and contracting when it is below 50. “Production activity expanded at a faster pace [in June] ... and market demand showed some improvement,” said Huo Lihui, chief statistician at the NBS service industry survey centre in a statement. The new orders subindex, which tracks manufacturing demand, returned to expansion territory at 51.2 in June, up from 49.9 in May.