China's Manufacturing Contraction Extends to October, Hang Seng Index Drops 3%

Li Chen
31 Oct, 2025
Hong Kong

China and Hong Kong indexes headed lower after business activity surveys confirmed a persistent deflationary trend. 

The Hang Seng Index decreased 0.5%, and the mainland-focused CSI 300 index fell 1% amid worries about the ongoing weakness in the private sector. 

China's manufacturing activity contracted for the seventh consecutive month in October, driven by a soft domestic demand and strong external headwinds.  

The manufacturing purchasing managers' index eased to 49.0 in October from 49.8 in the previous month, the National Bureau of Statistics said on Friday. 

The non-manufacturing PMI, which includes services and construction sectors, inched up to 50.1 in October from 50.0 in the previous month, according to the statistical bureau. 

The weakness in the manufacturing sector dragged down the overall business activities level, driven by weak economic momentum. 

The composite PMI in October eased to 50.0 from 50.6 in the previous month, the official data confirmed.

 

China Indexes and Stocks 

The Hang Seng Index decreased 0.5% to 26,050.08, and the mainland-focused CSI 300 index declined 1% to 4,661.77. 

The Hong Kong index closed down 3% in October, the first monthly decline since September amid volatile trade tensions between the U.S. and China.  

BYD dropped 4% to HK $91.45 after the company reported third-quarter results. 

The decline in sales and intense competition dragged down profit from a year ago by 32%. 

Alibaba Group Holding decreased 3.2% to HK $166.40, Tencent Holdings fell 2.3% to HK $636.0, and Meituan increased 0.7% to HK $103.20. 

SMIC plunged 5% to HK $75.20 as investors turned bearish about the chip manufacturing sector amid a lack of progress in trade tensions between the U.S. and China.