A private gauge of China’s manufacturing activity returned to contractionary territory in July, as softening new business growth led factories to scale back production.

As Beijing started to tackle "price wars" among manufacturers, average input prices increased for the first time in five months. Firms nevertheless lowered their selling prices again as competition for new business intensified. But export charges increased at the fastest pace in a year due to rising shipping and logistics costs.

The Caixin China General Manufacturing PMI dropped unexpectedly to 49.5 in July 2025, falling from 50.4 in June and missing forecasts of 50.2, marking the second time in three months that factory activity has contracted,