China's Manufacturing Growth Remained Strong In May

Li Chen
01 Jun, 2026
Hong Kong

Stocks in mainland China and Hong Kong lacked direction in Monday's trading, and investors reviewed the latest updates on business activity surveys. 

The Hang Seng Index increased 0.8%, and the mainland-focused CSI 300 Index decreased 0.6% amid lingering uncertainty over commercial shipping through the Strait of Hormuz.

The ongoing regional tensions in the Middle East have trapped about 2,000 ships in the narrow passageway, and about 100 million barrels per day of crude oil are prevented from reaching the global market. 

The disruption of commercial shipments through the strait has significantly impacted the economies of imported-oil-dependent nations like China.

 

China's Business Surveys Signal Twin Headwinds 

Business activity surveys confirmed the headwinds faced by China's economy, as energy supply disruptions raised input costs and subdued demand. 

China's official NBS Manufacturing PMI edged down to 50.0 in May from 50.3 in the previous month, confirming external and domestic headwinds faced by businesses. 

The input cost inflation moderated but remained elevated at 60.5 from 63.7, while the output price increase eased to a three-month low of 51.9 from 55.1 in the previous month, respectively, according to the National Bureau of Statistics. 

The NBS Composite PMI rose to 50.5 in May from 50.1 in April, supported by a slight rebound in the non-manufacturing sector to 50.1 from 49.4, while the manufacturing PMI inched lower to 50.0 from 50.3 in the previous month, respectively.

A separate private survey, which includes a larger sample of export-driven private companies, showed a slight easing of activities in May. 

The Rating Dog China General Manufacturing PMI inched lower to 51.8 in May from 52.2 in April, according to a report compiled by S&P Global. 

Despite the ongoing geopolitical tensions, the index remained above the no-change mark for the fourth month in a row. 

The composite PMI, which includes manufacturing and service sectors, expanded to 50.5 in May. 

Domestic demand for Chinese manufactured goods continued to expand in May, while the rate of growth eased from April but remained among the highest registered over the last five years. 

 

China Indexes and Stocks 

The Hang Seng Index increased 0.8% to 25,380.58, and the CSI 300 Index decreased 0.6% to 4,864.19. 

Technology shares in mainland trading led the decliners in Monday's trading. 

NAURA Technology decreased 2.3%, Eoptolink fell 1.4%, and Zhongji Innolight declined 1.6%. 

Alibaba Group Holding rose 2.2%, Tencent Holdings added 2.6%, and Baidu Inc. decreased 0.6%.