China’s factory activity expanded for a second straight month in April even as higher energy prices related to the Iran war posed a headwind, according to an official survey released Thursday by the National Bureau of Statistics.
The manufacturing purchasing managers index slipped to 50.3 in April from 50.4 in March, the statistics agency said. Because the PMI is measured on a 0-to-100 scale, readings above 50 indicate expansion rather than contraction.
The official report showed the slowdown in demand as the new orders sub-index fell to 50.6 from 51.6. At the same time, the production sub-index increased to 51.5, suggesting output kept improving despite the softer orders component.
Leah Fahy, a senior China economist at Capital Economics, wrote in a research note this week that higher oil prices had not yet weighed on industrial activity in China. Fahy said the recent acceleration in industrial activity appeared to have been driven by stronger export demand, and she added that surging oil prices were also lifting global demand for green technology.
Fahy also linked the green-technology demand to Chinese manufacturers, saying the rise was a boon for companies that dominate manufacturing of clean-energy equipment. She further pointed to tariffs as a potential swing factor for export momentum after the United States lowered tariffs on China following a Supreme Court ruling earlier this year against President Donald Trump’s sweeping tariffs.
That tariff change, Fahy said, could allow China’s exports to the U.S. to pick up in coming months. She also cited a planned visit to Beijing by Trump to meet with Chinese leader Xi Jinping next month as a possible factor that could help extend a year-long trade truce reached between the two leaders late last year.
Alongside the official PMI, a separate private sector survey by S&P Global and RatingDog was more upbeat. That survey showed China’s factory activity rose to 52.2 in April from 50.8 in March, according to the report, which focuses more on smaller and export-focused private companies.
China’s broader economic backdrop also remains mixed, with the official data taking place as Chinese leaders target 4.5% to 5% growth for 2026. The official report referenced that the economy grew at a 5% annual pace in January through March, accelerating from the previous quarter and beating economists’ estimates, while noting that a prolonged property sector slump has weighed on domestic investment and consumption.