Beijing – A new Reuters poll suggests that China’s factory sector is poised to rebound in September after two months of contraction. The poll, which surveyed 29 economists, projects the official manufacturing Purchasing Managers’ Index (PMI) to rise to 50.1, just above the 50‑point line that separates expansion from contraction. The previous month’s reading was 49.8, marking two straight months of decline.
Poll details and related indicators
The upcoming PMI figure will be released by the National Bureau of Statistics on Wednesday. A private PMI compiled by S&P Global’s RatingDog is also expected to tick up slightly, from 51.5 in August to 51.6, according to the same poll.
Both surveys are based on company‑level questionnaires and are widely used gauges of manufacturing health. The modest rise reflects expectations that the sector recovered from August’s weather‑related disruptions, when heavy rain and typhoons hampered production in several regions.
Government response and policy outlook
At a State Council meeting on Monday, Premier Li Qiang announced a “package of pragmatic and effective incremental policy measures” aimed at easing economic strains. State media Xinhua reported that the plan will focus on stabilising the property market, promoting employment and increasing household income.
Goldman Sachs economist Lisheng Wang described the measures as targeted easing through fiscal and credit channels rather than broad‑based stimulus. Wang expects the Ministry of Finance to approve an additional 500 billion yuan (about $75 billion) in local‑government bond issuance quotas in the coming weeks, while maintaining a forecast of no policy‑rate cuts for the remainder of 2026 due to narrow bank net‑interest margins.
Broader economic context
China’s third‑quarter GDP data and September activity indicators are slated for release later this month. Officials have reiterated that the economy remains on track to meet the annual growth target of 4.5%‑5%.
Nevertheless, recent retail‑sales and investment figures have signalled weakening momentum. Households remain cautious about spending amid uncertain income prospects and concerns about the impact of artificial‑intelligence technologies on employment.
Exports continue to provide a buffer for the world’s second‑largest economy, offsetting some domestic softness. Earlier this week, China and the United States agreed to lower tariffs on $60 billion of each other’s goods, covering items such as U.S. corn and cosmetics and Chinese toys and household appliances. Analysts caution that the limited agreement is unlikely to fundamentally reshape the broader trade relationship.
Outlook
If the PMI does indeed cross the 50‑point threshold, it would mark the first expansionary reading since July, offering a modest boost to confidence in China’s manufacturing base. The combination of incremental policy support, continued export strength, and a modest tariff de‑escalation suggests a cautiously optimistic near‑term trajectory, even as domestic demand challenges persist.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
