China factory activity expands again despite global disruptions

China’s manufacturing sector continued to grow in April, showing resilience despite rising energy costs and global supply disruptions linked to the Middle East conflict.

Official data released by the National Bureau of Statistics showed the manufacturing Purchasing Managers’ Index (PMI) came in at 50.3, remaining above the 50 mark that separates expansion from contraction. Although slightly lower than March’s 50.4, the figure exceeded expectations of 50.1 in a Bloomberg survey.

The world’s second-largest economy has faced ongoing challenges from weak domestic demand and slowing investment, which have weighed on its manufacturing sector in recent years. March had marked the strongest reading in a year, following a prolonged period of contraction.

NBS statistician Huo Lihui said overall economic output maintained expansion in April, with manufacturing continuing on a positive trajectory.

Strong demand was recorded for electrical and information technology equipment, while activity in petroleum and coal processing sectors remained weaker.

At the same time, rising raw material costs—particularly in energy and chemicals—put pressure on manufacturers.

Despite the global uncertainty caused by the US-Israeli conflict with Iran, which has driven up energy prices and disrupted shipping through the Strait of Hormuz, Chinese factories appear to have remained stable.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the PMI data suggests the sector has not been significantly affected by the conflict. He added that a slightly looser monetary policy stance has helped offset higher energy costs.

Julian Evans-Pritchard of Capital Economics noted that strong exports and external demand were key drivers of growth, with increased demand for memory chips and green technology products playing an important role.

However, not all sectors performed well. China’s non-manufacturing PMI, which measures activity in services and construction, fell to 49.4 in April from 50.1 in March.

The decline was driven by weaker performance in wholesale and retail sectors, indicating that consumer demand remains subdued.