China’s manufacturing activity expanded more than expected, cementing the country’s two-track economy with domestic demand still in the doldrums.
The relatively upbeat purchasing managers’ index reading for this month was largely driven by the global AI investment boom and the broader export sector, but other industries in the world’s second-biggest economy remain sluggish: Real estate construction contracted, and consumer spending was lackluster.
“The hope of rebalancing is dashed,” a Bank of America economist told CNBC; as if to confirm that downbeat assessment, Nikkei reported that major Chinese smartphone makers were slashing 2026 sales targets.
Analysts are now awaiting next month’s Politburo meeting for signs of a potential stimulus package, ING’s China chief economist wrote.
