The Caixin China General Composite PMI dropped to 49.6 in May 2025 from 51.1 in the previous month, signaling the first contraction in private sector activity since December 2022. While the services sector saw a slight uptick, a sharper decline in manufacturing dragged the overall index down. New orders contracted again, with foreign demand remaining weak across both sectors. Employment dipped slightly due to job cuts in manufacturing, and backlogs of work were reduced for the first time since January. On the pricing front, input cost inflation eased, but output prices continued to fall, with charges declining at the steepest rate in over two years. “Downward pressure on the economy has significantly intensified compared to preceding periods,” said Dr. Wang Zhe, Senior Economist at Caixin Insight Group. He added that the effectiveness of previous consumption-stimulating measures needs further evaluation, and follow-up policies should be tailored to current economic conditions.