China’s factory activity returned to growth in June, according to a private survey released on Tuesday, as new orders increased and lifted production levels.
The Caixin/S&P Global manufacturing purchasing managers’ index rose to 50.4 in June from 48.3 in May. A reading above 50 indicates expansion.
The result contrasts with the official government index, which showed contraction for a third straight month.
The Caixin report showed that overall new orders rose in June after falling in May. Factory managers linked the rise to better trade conditions and sales promotions.
As a result, output reached its highest level since November 2024.
Despite the improvement in domestic demand, new export orders stayed negative in both the Caixin and official surveys. Respondents said the global environment remained difficult, and demand at home was still weak.
A rise in new work and fewer staff led to a buildup of backlogged orders for the first time in three months. However, employment in manufacturing declined due to resignations and layoffs.
Some smaller exporters reported selling at a loss and cutting wages to stay in business.
Output prices fell at the fastest pace since January, helped by lower input costs. Export prices continued to rise, driven by higher shipping and logistics expenses.
Business confidence slipped in June and stayed below the long-term average.
Separately, U.S. Treasury Secretary Scott Bessent said last week that the U.S. and China had resolved issues around Chinese shipments of rare earth minerals and magnets. The agreement followed a deal made in May in Geneva.
China’s Commerce Ministry said export applications for controlled items will be processed according to the law.
