China's manufacturing surges, Caixin PMI shows, but global risks grow
China's factory activity grew the fastest in about two years in May due to production gains and new orders, particularly at smaller firms, a private sector survey showed on Monday, lifting the outlook for the second quarter.
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The Caixin/S&P Global manufacturing PMI rose to 51.7 in May from 51.4 the previous month, the highest since June 2022, and beating analysts' forecasts of 51.5. The 50-point mark separates growth from contraction.
To counter soft domestic demand and a years-long property crisis, China has boosted infrastructure investment and ploughed funds into high-tech manufacturing to bolster the broader economy this year.
However, the full effects of its industry policy support have yet to be felt by businesses and workers.
The upbeat Caixin PMI contrasts with an official PMI survey on Friday that showed a surprise fall in manufacturing activity.
The divergent indicators combined with other mixed data suggest the economic recovery is struggling to sustain momentum in the second quarter.
«The key question is whether China's exports will continue to hold up well in the coming months,» said Zhou Hao, economist at Guotai Junan International.
«The export orders index dropped significantly in the official PMI but remained relatively resilient in the Caixin PMI.»
The Caixin survey is believed to be skewed more towards smaller, export-oriented firms than the
