China’s Factories Still Struggling: Official Data Shows Only Small Signs of Improvement

China’s government says its factories had a tough June 2025, even though things got a little better than in May. The official number that tracks factory health, called the Purchasing Managers’ Index (PMI), reached 49.7 in June.

This is up a bit from 49.5 in May, but it’s still below 50, which means factories are shrinking, not growing. This is the third month in a row that China’s factories have not grown. Some areas, like new orders, showed small improvements.

For example, the sub-index for new orders went up to 50.2 in June from 49.8 in May. New export orders also rose slightly, but at 47.7, they are still shrinking. These numbers come from China’s National Bureau of Statistics.

The service and construction sectors did a little better. The non-manufacturing PMI, which covers these areas, was 50.5 in June, up from 50.3 in May. This means these parts of the economy are barely growing.

China’s factories face several problems. People in China are spending less because of worries about jobs and the ongoing property crisis. At the same time, selling goods abroad has become harder.

Exports to the United States dropped by 34.5% in May compared to last year, after already falling by 21% in April. This is because of new U.S. tariffs and trade tensions.

China’s government wants people to spend more at home, but this has not fixed the problems for factories yet. Prices for many products are falling because there are too many goods and not enough buyers.

This makes it harder for companies to make a profit. Many experts do not fully trust China’s official economic numbers. There have been cases where local officials made numbers look better to meet targets.

Even though China’s statistics office says the data is correct, outside researchers and business leaders often use other signs, like electricity use or shipping data, to check if the economy is really growing.

For companies and investors around the world, knowing the true health of China’s factories is important. China is a huge part of global trade. If its factories are weak, it can affect businesses and jobs in many other countries.

Because of doubts about official data, many people watch China’s numbers carefully, but they also look for other clues to understand what is really happening.

China’s factory sector is not out of trouble yet. The small improvements in June do not change the bigger picture: the world’s second-largest economy is still facing serious challenges.