BEIJING — China’s factory activity was flat in May 2026, with the official manufacturing purchasing managers index (PMI) holding at 50, according to data released by the National Bureau of Statistics on May 30, 2026. The reading was a slight moderation from April’s 50.3, marking the boundary between expansion and contraction in factory output.
A PMI reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 signals contraction. The new orders sub-index declined to 49.9 in May from 50.6 in April, slipping into contraction territory. The production sub-index also edged down to 51.2 from 51.5, remaining in expansion but at a slower pace. Raw material stockpiles fell further, with that sub-index dropping to 48.6 from 49.3.
China has been less affected by the global energy shock from the Iran war than many other countries. Oil prices surged after the closure of the Strait of Hormuz, a critical global oil transit route, but China’s ample oil reserves and diversified energy sources have helped it weather the disruption. “Though the energy crisis remains the dominant headwind for Asia, China is relatively more shielded given its robust energy security set-up.” Frederic Neumann, Chief Asia Economist at HSBC bank, wrote in a research note last week.
Exports continue to support China’s broader economy, even as domestic demand remains weak due to a prolonged property sector slump that has reduced consumer confidence and investment. While Chinese exports to the United States have declined year-on-year for most of the past year, global exports—particularly to Europe and Southeast Asia—have stayed robust. Growth has been driven by autos, technology, and artificial intelligence-related goods.
Hopes for a rebound in U.S. exports have risen following a mid-May summit in Beijing between President Donald Trump and Chinese leader Xi Jinping. “Domestic demand is lagging, but high-end manufacturing and exports are holding the line.” Robin Xing, Chief China Economist at Morgan Stanley, wrote in a research note last week. Morgan Stanley said China is likely to meet its 2026 economic growth target of 4.5% to 5%, the lowest annual target since 1991. The bank also noted that oil prices and the easing of uncertainties around global oil supplies would be key factors shaping China’s economic path.