China’s Manufacturing Mystery: Caixin PMI Shows Growth In June, State Data Says Otherwise

China’s factory activity expanded in June, aided by a rise in new orders that incentivized higher output, a private survey said.

The Caixin/S&P Global manufacturing PMI rose to 50.4 in June from 48.3 in May, also surpassing expectations of a Reuters poll. This was in sharp contrast with official data released on Monday, which showed a contraction.

“While modest, the rate of growth was the quickest since November 2024, and driven by reports of firmer demand conditions,” the report said on Tuesday.

It also found a slight accumulation of backlogged orders for the first time in three months due to both higher new work inflows and a reduction in workforce capacity. Like the official government survey, new exports remained below the 50-mark, which separates contraction from growth.

China’s exports to the U.S. plunged 34%, the most significant decline since February 2020, at the onset of the COVID-19 pandemic, following President Donald Trump's imposition of tariffs on Chinese exports to the highest levels in a century. However, the two countries have agreed to lower the tariffs to much more palatable levels.

Retail sentiment on iShares MSCI China ETF (MCHI) on Stocktwits was in the ‘bullish’ territory, while retail chatter was the ‘extremely high.’

Goldman Sachs economists reportedly said that Chinese policymakers are unlikely to announce major stimulus measures at the July Politburo meeting, as they appear to be satisfied with the country's economic performance so far this year.

On Friday, China’s commerce ministry confirmed that Beijing had reached an agreement with Washington on further details of the existing trade framework. The ministry noted that it will review and approve export applications for controlled items. In return, the U.S. is expected to lift various restrictions against China.

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