Workers handle railway transport operations in Yantai, Shandong Province, eastern China, on June 20. [AP]
Workers handle railway transport operations in Yantai, Shandong Province, eastern China, on June 20. [AP]

China's manufacturing activity returned to expansion territory this month for the first time in a month, buoyed by strong exports fueled by the AI boom.

The National Bureau of Statistics announced Tuesday that the country's manufacturing Purchasing Managers' Index for June came in at 50.3.

China's manufacturing PMI hit a year-to-date low of 49.0 in February before holding in expansion territory in March (50.4) and April (50.3), then slipping back to 50.0 in May.

The PMI is an indicator of economic conditions in a given sector, based on surveys of corporate purchasing managers. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Huo Lihui, chief statistician at the NBS Service Industry Survey Center, said the PMI for high-tech manufacturing rose 0.6 points from the previous month to 53.5, continuing its strong momentum.

Reuters said the improvement in the manufacturing PMI was largely driven by strength in high-tech manufacturing tied to the AI boom, while domestic demand remained weak and exports in other product categories were still sluggish.

Xu Tianchen, an economist at the Economist Intelligence Unit, said companies appeared to have front-loaded exports ahead of new US tariffs expected to take effect under Section 301 of the Trade Act in late July.

Meanwhile, the non-manufacturing PMI for June came in at 50.2, slightly above the previous month's reading of 50.1.


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