China factory activity grows at fastest pace in 5 months in Sept: RatingDog PMI

China's manufacturing sector experienced a notable surge in September, with private-sector data revealing the fastest expansion in five months. The RatingDog Manufacturing PMI climbed to 52.1 from 51.5 in August, surpassing expectations of 51.7. This figure remained above the 50 threshold, indicating growth, for the 10th consecutive month and marked the highest reading since April.

The RatingDog services PMI also increased to 51.6 from 51.4, exceeding forecasts of 51.3. Meanwhile, China's official manufacturing PMI rose to 50.1 in September from 49.8 in August, reversing two consecutive months of contraction. Analysts noted that manufacturing has been a relative strength this year, primarily fueled by external demand as domestic consumption and investment lag.

The official non-manufacturing PMI also climbed to 50.2 from 49.0, beating expectations of 49.2. The composite PMI, covering both manufacturing and services, rose to 50.7 from 49.5. Despite the improvement, the rebound in factory activity occurred amidst heavy rain and typhoons causing production disruptions in August, as well as a prolonged property downturn and cautious consumer spending.

The State Council announced measures to stabilize the property market, support employment, and boost incomes. However, the divergence between China's economy, as indicated by the official and private surveys, remains evident. ING analysts suggested that favorable base effects and a marginal uptick in September's activity data may help third-quarter GDP recover from the 4.3% growth seen in the second quarter.