China's manufacturing industry signaled resilience as activity grew in May, with Caixin's purchasing manager's index (PMI) recording 50.9 for the month, up 1.4 percentage points over the previous month.

The snapshot indicator of operating conditions in the manufacturing sector rebounded to above the 50-point level separating expansion and contraction in May for the first time since February. 

In a further breakdown of the data, a Caixin report summarizing the data said the production index rose to the highest since July 2022, while the subindex for total new orders rose to the second-highest reading in two years.

Businesses said improved potential demand and new customers led to higher sales and output, it reported.

In addition, the index of new export orders continued to rebound slightly in May, indicating an improvement in external demand.

Wang Zhe, senior economist at Caixin Insight Group, said both market supply and demand improved in May with active new orders. 

"Currently, stabilizing employment, increasing income and bolstering expectations through proactive fiscal policy should be prioritized given a dire job market and mounting deflationary pressure," he said in a note.

(Cover via CFP)