For the third consecutive quarter, the manufacturing industry in China has shown faster growth compared to the entire economy, highlighting the significant role of industry and exports in driving the world's second-largest economy.

Detailed gross domestic product data released showed a 6.2 per cent growth in manufacturing during the last quarter. This exceeded the overall economy's 4.7% real growth, maintaining the sector's 27% contribution to total activity, equaling the previous quarter's one-year peak. The strength is opposite to the declining real estate industry, which shrunk for the fifth consecutive quarter, according to the data.

Beijing has focused on investing in high-tech manufacturing in order to boost growth in recent years, particularly as it moved to decrease financial risks by deflating a housing bubble. This has increased the production and exports of items like electric cars, batteries, and semiconductors, but has not caused an increase in domestic spending. This indicates that businesses are increasingly dependent on international demand, which is now at risk due to increasing trade barriers.

Data released on Monday indicated that economic growth in the second quarter decelerated more than anticipated, as retail sales experienced their weakest performance since 2022, dampening overall activity. Nevertheless, international demand was a highlight. Chinese companies exported goods valued at US$902 billion in the second quarter, marking the highest level in nearly two years.