China Manufacturing Industry Tracker – Key Data for 2024 and 2025

The manufacturing industry is a cornerstone of China’s economy and a crucial sector underpinning the global economy. In 2023, the manufacturing sector’s added value accounted for 26.2 percent of China’s total GDP, underscoring its vital role in the nation’s economic structure. Despite a gradual shift towards a more service-oriented and high-tech economy, manufacturing remains a key driver of economic growth, providing substantial employment, innovation, and export revenue.

Globally, China’s manufacturing prowess is even more pronounced. In 2023, the country contributed around 30 percent of the global manufacturing added value, solidifying its position as the world’s manufacturing powerhouse. This immense contribution underscores the sector’s critical role in global supply chains, influencing everything from consumer electronics to heavy machinery.

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China’s manufacturing industry continues to attract significant foreign investment and the country remains a preferred destination for multinational companies due to its unique advantages. These include a vast and skilled labor force capable of producing a wide range of goods at competitive costs, comprehensive and efficient supply chains, and advanced infrastructure. Additionally, strong government support through policies, subsidies, and incentives further enhances China’s appeal as a manufacturing hub.

The importance of China’s manufacturing industry extends beyond its borders, playing a crucial role in the global economy. As a major supplier of goods worldwide, any shifts in China’s manufacturing sector have significant ripple effects across global markets, highlighting its integral role in international trade and economic stability.

In this 2024-25 Manufacturing Tracker, China Briefing provides the latest data and information on China’s manufacturing industry to help foreign investors and analysts stay up-to-date with the latest economic indicators, resources, and policies impacting this vast industry.

Key indicators of the China manufacturing industry

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Manufacturing GDP

Although the share of manufacturing within the economy has steadily shrunk over the past few decades, it remains the single largest contributing sector to economic growth, consistently accounting for over a quarter of China’s total GDP.

In 2024, manufacturing GDP reached RMB 33.55 trillion (US$4.67 trillion), up 6.0 percent year-on-year and accounting for around 24.86 percent of total GDP.

Quarterly Manufacturing GDP

Quarter
Manufacturing GDP (RMB trillion)
Percent of total GDP (%)

2024 (full year)
33.5507
24.86

Q4 2024
8.9825
24.03

Q3 2024
8.3698
25.14

Q2 2024
8.6544
26.99

Q1 2024
8.0143
27.04

Q4 2023
8.854
25.45

Q3 2024
8.3272
26.02

Q2 2023
8.5079
27.62

Q1 2023
7.9567
27.92

Source: National Bureau of Statistics; China Briefing

Manufacturing added value

Per the National Bureau of Statistics (NBS)’s definition, the industrial value-added growth rate, or the industrial growth rate, is an indicator used to reflect the degree of change in the volume of industrial production over a certain period of time. Industrial value-added growth covers three broad sectors: mining, manufacturing, and the supply of utilities and resources. The manufacturing value-added growth rate is therefore an indicator of the production volume within the manufacturing sector alone.

This indicator can be used to judge the short-term trend of the industrial economy and the degree of economic prosperity and acts as an important reference and basis for formulating and adjusting economic policies and implementing macroeconomic regulation.

Except for August, China’s manufacturing value-added growth has remained above 5 percent in 2024.

Monthly Growth in Manufacturing Added Value

Month
Year-on-year growth (%)

2024 (full year)
6.1

Dec 2024
7.4

Nov 2024
5.4

Oct 2024
5.3

Sep 2024
5.4

Aug 2024
4.5

Jul 2024
5.3

Jun 2024
5.5

May 2024
6

Apr 2024
7.5

Mar 2024
5.1

Jan to Feb 2024
7.1

Source: National Bureau of Statistics

Manufacturing PMI

The Manufacturing Purchasing Managers’ Index (PMI) is a valuable tool for investors to gauge the current state of China’s manufacturing industry. It is an indicator of the economic health of the manufacturing sector, based on surveys of purchasing managers across various industries.

According to the NBS, manufacturing PMI in China is calculated by weighting five classification indices, which in turn are weighted depending on their leading impact on the economy. These indices are:

The new order index, weighted at 30 percent;
The production index, weighted at 25 percent;
The employee index, weighted at 20 percent;
The supplier delivery time index, weighted at 15 percent; and
The raw material inventory index, weighted at 10 percent.

A PMI of over 50 percent reflects an expansion in the industry compared with the previous month, whereas a PMI of below 50 percent reflects a contraction compared with the previous month (National Bureau of Statistics).

Monthly Manufacturing Purchasing Managers Index

Month
PMI (%)

Dec 2024
50.1

Nov 2024
50.3

Oct 2024
50.1

Sep 2024
49.8

Aug 2024
49.1

Jul 2024
49.4

Jun 2024
49.5

May 2024
49.5

Apr 2024
50.4

Mar 2024
50.8

Feb 2024
49.1

Jan 2024
49.2

Source: National Bureau of Statistics

Manufacturing export

Manufacturing exports can help investors understand the current demand for China’s manufacturing goods. When exports are strong, it typically reflects robust global demand for Chinese-made goods. High export levels also suggest that China remains competitive in international markets, maintaining its position as a global manufacturing leader.

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Conversely, a decline in manufacturing exports might signal weakening demand, potential challenges in production, or increased competition from other countries. This can be a warning sign for investors about potential slowdowns in the sector.

Per the NBS, the export delivery value refers to the value of products exported by industrial enterprises themselves (including exports to Hong Kong, Macao, and Taiwan) or entrusted to foreign trade departments for export, as well as the value of products produced by foreign merchants based on samples, materials and parts supplied, assembly, and compensation trade.

The industrial export delivery value covers exports from the three major industrial subsectors: mining, manufacturing, and the supply of utilities and resources.

According to data from both the  and , manufacturing export accounts for over 90 percent of China’s total exports. In 2023, China exported RMB 23.51 trillion (approximately US$3.68 trillion) worth of manufacturing products, while total goods exported amounted to RMB 23.77 trillion (approximately US$3.71 trillion), with manufacturing products accounting for 98 percent of the total. In this context, manufacturing exports account for a larger percentage of the overall industry exports. This outcome is primarily due to the exclusion of agricultural exports from the total goods trade.

As there is currently no publicly available data on manufacturing export delivery value, below we use industrial export delivery value to reflect the manufacturing exports.

Industrial Export Delivery Value

Month
Export value (RMB trillion)
Year-on-year growth (%)

2024 (full year)
15.4338
5.1

Dec 2024
1.4394
8.8

Nov 2024
1.3556
7.4

Oct 2024
1.3438
3.7

Sep 2024
1.4099
3.4

Aug 2024
1.2994
6.4

Jul 2024
1.2785
6.4

Jun 2024
1.3175
3.8

May 2024
1.2571
4.6

Apr 2024
1.2328
7.3

Mar 2024
1.2671
1.4

Jan to Feb 2024
2.1466
0.4

Source: National Bureau of Statistics

Fixed asset investment

Fixed asset investment (FAI) in manufacturing provides investors with valuable insights into the long-term confidence and growth prospects of China’s manufacturing industry. When businesses are increasing investments in machinery, infrastructure, and factory expansions, it indicates optimism about future demand and a belief in the industry’s growth potential.

However, a decline in FAI may signal caution or uncertainty within the sector, potentially reflecting concerns about future demand, profitability, or economic conditions. They may also reflect underlying challenges, such as market access difficulties or regulatory hurdles that make it harder for companies to operate or expand.

The NBS defines FAI as the total workload of constructing and purchasing fixed assets completed in a certain period, as well as the related expenses, expressed in monetary terms.

Growth in Manufacturing Fixed Asset Investment

Month
%

2024 (full year)
9.2

Nov 2024
9.3

Oct 2024
9.3

Sep 2024
12.3

Aug 2024
9.1

Jul 2024
9.3

Jun 2024
9.5

May 2024
9.6

Apr 2024
9.7

Mar 2024
9.9

Jan – Feb 2024
9.4

Source: National Bureau of Statistics

Foreign direct investment

Manufacturing continues to be a major magnet for foreign direct investment in China, absorbing 26.77 percent of total FDI in 2024.

FDI can provide an important indicator of international confidence in China’s manufacturing sector. Increasing FDI suggests that foreign companies see it as a profitable and stable environment for long-term investments. Conversely, a decline in FDI may indicate waning confidence due to factors like rising costs, regulatory challenges, or geopolitical tensions, suggesting potential vulnerabilities in the sector.

It is important to note that FDI figures may be skewed by a few large investment projects in some reporting months or years. Large investments by a few multinationals can disproportionately influence the numbers, and FDI figures therefore do not always reflect the accessibility of the industry to foreign companies as a whole.

FDI in Manufacturing

Month
Actual utilized foreign capital (RMB billion)

2024 (full year)
221.21

Dec 2024
18.71

Nov 2024
10.18

Oct 2024
13.08

Sept 2024
15.14

Aug 2024
9.62

Jul 2024
12.62

Jun 2024
24.75

May 2024
13.42

Apr 2024
22.63

Jan – Mar 2024
81.06

Source: Ministry of Commerce

Costs and factors of production in the China manufacturing industry

Labor costs

Labor costs in China have risen substantially in recent decades, with average salaries more than doubling over the last decade.

Annual average salaries are considerably higher in the public sector than the private sector across the majority of industries, including manufacturing. In 2023, the urban annual average salary in the public manufacturing industry was RMB 103,932 (US$14,568) an increase of 6.6 percent from 2022, whereas in the private sector, it reached RMB 71,762 (US$10,059), up 6.5 percent from 2022.

Urban Annual Average Wages in Private and Non-Private Manufacturing Sector

Private
Public

Year
Salary (RMB)
Growth rate (%)
Salary (RMB)
Growth rate (%)

2023
71,762
6.5
103,932
6.6

2022
67,352
5.3
97,528
5.5

2021
63,946
10.4
92,459
11.7

2020
57,910
9.6
82,783
5.9

Source: National Bureau of Statistics

Manufacturing salaries have grown at an annual average rate of 9.1 percent and 9.5 percent in the private and non-private sectors respectively since 2013. Public sector manufacturing salaries rose from RMB 46,431 (US$6,493) in 2013 to RMB 103,932 (US$14,568) in 2023, while private sector manufacturing salaries rose from RMB 32,035 (US$4,479) to RMB 71,762 (US$10,059).

Average Annual Wages in the Manufacturing Industry (RMB)

Year
Overall average
Mid- to higher-level management
Professional and technical personnel
Administrative office staff and security personnel
Social production services and life services personnel*
Production and related personnel

2023
92,538
186,584
134,086
95,465
93,318
74,312

2022
86,933
176,313
124,960
90,322
88,294
70,642

2021
82667
167097
117611
85614
83429
68024

2020
74,641
152,996
106,681
78,229
76,036
61,324

Note: Wages of companies with an annual average main business income of over RMB 20 million.

* Personnel engaged in commodity wholesale and retail, transportation, warehousing, postal and express delivery, information transmission, software and information technology, accommodation and catering, finance, leasing and business, environmental protection, culture, sports and entertainment, etc.

Source: National Bureau of Statistics

China also continues to raise its minimum wages, which vary between different provinces and cities. As of January 2025, Shanghai has the highest monthly minimum wage, at RMB 2,690 per month (US$370). Beijing has the highest hourly minimum wage at RMB 26.4 per hour (US$3.7).

The lowest minimum wages can be found in Guangdong, with RMB 1,620 (US$225.7) per month.

For more information on China’s average wages, see our article: .

For up-to-date information on China’s minimum wages, see our article: .

Utility costs

China’s electricity grid is divided into six main regions: Northwestern China, Northern China, Central China, Northeastern China, Eastern China, and Southern China. The State Grid Corporation of China (SGCC) supplies electricity to all of the regions except Southern China, which is serviced by China Southern Power Grid (CSG) (covering the provinces of Guangdong, Guangxi, Yunnan, Guizhou, and Hainan). SGCC and CSG are both state-owned companies and are tasked with periodically setting electricity prices for each region based on a set of national standards.

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China’s regional electricity pricing is governed by the , a document formulated by the National Development and Reform Commission (NDRC).

Electricity prices are adjusted at regular intervals depending on varying factors such as costs of fuel, demand, and government policies.

China’s water utility industry is much more scattered, with numerous utility companies providing services across different stages of the supply chain and in different regions. Among the largest companies are Beijing Enterprises Water Group (BEWG), Middle Environmental Protection Water Affair Investment Limited Company, China Water Affairs, Beijing Capital Eco-Environment Protection Group, and SUEZ Group.

Under China’s Water Law, water supply prices are determined in accordance with specific measures formulated by provincial-level governments (or above) in conjunction with the water administration authorities or other water supply administration authorities. This means water prices will vary considerably from region to region. Regional water pricing must nonetheless adhere to the Measures for the Administration of Urban Water Supply Prices, for urban areas.

For more information on China’s power rates, see our article:

China manufacturing industry clusters

China is home to over 2,000 industry clusters, areas where businesses and industries are consolidated to foster collaboration and competition. These clusters typically focus on specialized sectors, such as electronics, textiles, automotive manufacturing, or aviation, among many others. The proximity of these businesses allows for efficient supply chain integration, reducing costs and improving responsiveness.

The majority are located in economic hubs in the eastern and central provinces, with the distribution of different industrial sectors across the country often linked to each region’s natural resources, traditional industries, labor force, and production costs. However, with the emergence of new technology and advanced manufacturing industries and concerted efforts from the central and local governments, western and northern provinces have begun to cultivate new industry clusters focused on modern sectors.

For more information on China’s industry clusters, including breakdowns of different industries, see our article .

Preferential policies and tax incentives for the manufacturing industry

China provides a range of preferential policies for companies in the manufacturing industry, including tax incentives to help lower value-added tax (VAT), corporate income tax (CIT), and tax deductions for research and development (R&D). The preferential policies are extensive and many apply to multiple different industries, not exclusively manufacturing. The table below contains a non-exhaustive list of the incentive policies currently available for companies in the manufacturing sector.

China’s tax authority reminds taxpayers that they can apply for the super deduction of R&D expenses for the first three quarters of 2024 during the October filing period. When prepaying CIT for the third quarter in October (for quarterly prepayments) or in September (for monthly prepayments), companies have the option to apply the super deduction policy for R&D expenses incurred in the first three quarters of the year. This decision should be based on their profit and loss situation, R&D expense accounting, and the total amount of R&D expenses.

For more information, see our article: China Tax Filing: Apply for Super Deductions of R&D Expenses for Q1-3 2024 in October

Tax Incentives for the Manufacturing Industry

Incentive
Details
Conditions
Effective period

VAT credit refund policy
VAT credit refund policy for companies in the manufacturing industry that meet the conditions for deferring tax refunds.
VAT sales generated from business activities in the eligible manufacturing industry must account for more than 50 percent of total VAT sales.
2022 onwards

VAT reduction for small-scale taxpayers
VAT levied at a reduced rate of 1 percent for small-scale taxpayers subject to a 3 percent tax rate on taxable sales revenue.
Small-scale taxpayers who are subject to the reduced 1 percent tax rate must issue VAT invoices at the 1 percent tax rate. Taxpayers can choose to waive the tax reduction and issue VAT special invoices for that sales revenue.
January 1, 2023, to December 31, 2027

VAT exemption for small-scale taxpayers
VAT exemption for small-scale taxpayers with monthly sales of RMB 100,000 (US$13,861) or below.
Small-scale taxpayers that have VAT taxable sales exceeding RMB 100,000 in total in a given month, but which do not exceed RMB 100,000 when excluding the sales of real estate, the sales revenue from goods, labor, services, and intangible assets obtained is exempt from VAT.
January 1, 2023, to December 31, 2027

End-of-period VAT deduction from the tax basis of certain taxes and fees
Deduction of the refunded VAT amount from the tax calculation basis of the urban maintenance and construction tax, education surcharge, and local education surcharge.
Applicable to general taxpayers implementing VAT refunds at the end of the period.
From July 27, 2018 onward

VAT exemption for technology transfer, technology development, and related technical consultation and technical services
VAT exemption for technology transfer, technology development, and related technical consultation and technical services.
VAT payers who provide technology transfer and technology development.
From May 1, 2016 onward

15 percent CIT rate for high-tech companies
Reduced 15 percent CIT rate for high-tech manufacturing companies identified for support from the state.
Companies that are resident in the Chinese mainland and continuously engaged in research, development, and technology transfer within the “National Key Supported High-tech Fields,” have independently formed core intellectual property rights, and conduct business activities based on this.
Indefinite

15 percent CIT rate in development zones
Reduced 15 percent CIT rate for eligible companies that are established in certain development zones and lesser-developed regions.
Companies that have “substantial operations” within one of the dedicated regions and are engaged in one of the region’s “encouraged industries”.

Eligible zones/regions:

Lingang New Area (Shanghai)
Fujian Pingtan (Fuzhou)
Hengqin Cooperation Zone (Zhuhai)
Nansha Economic Zone (Guangzhou)
Hainan FTP (Hainan)
Western regions (Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Inner Mongolia, Guangxi)

Varies by region.

CIT reduction and exemptions for qualified technology transfer income
Within a given tax year:

CIT is exempted for the part of the resident enterprise’s technology transfer income below RMB 5 million (US$700,830); and
CIT is halved on the part exceeding RMB 5 million.

Resident enterprises engaged in technology transfer.
From 2015 onward

Reduced CIT rate for Small and Low-Profit Enterprises (SLPEs)
Reduced 20 percent CIT rate
Companies with annual taxable income under RMB 3 million (US$458,500); companies with less than 300 employees; and companies with a total asset value of less than RMB 50 million (US$7.7 million).
January 1, 2022/2023 to December 31, 2027

R&D pre-tax super deduction
200 percent pre-tax deduction of the expenses incurred in conducting R&D activities that do not form intangible assets for resident companies
Applicable to expenses related to eligible R&D activities, including expenses related to systematic activities with clear objectives continuously carried out by enterprises to obtain new scientific and technological knowledge, creatively apply new scientific and technological knowledge, or substantially improve technology, products, or services, and processes.
Indefinite.

In addition to the tax incentives, China currently also provides the following fee reduction policies for companies in the manufacturing industry:

Fee Reduction Policies for the Manufacturing Industry

Incentive
Details
Conditions
Effective period

Reduction of “six taxes and two fees” for small-scale taxpayers
Reduced 50 percent levy rate for:

Six taxes: resource tax, urban maintenance and construction tax, real estate tax, urban land use tax, stamp duty (excluding securities transaction stamp duty), and cultivated land occupation tax); and
Two fees: education surcharge and local education surtax.

Applicable to small-scale VAT taxpayers, SLPEs, and individually-owned businesses.
January 1, 2022 to December 31, 2027

Reduction of employment security fund payments for disabled persons

Employers with a disability employment ratio of 1 percent or more, but who do not meet the ratio stipulated by the local government, are allowed to pay just 50 percent of the required employment security fund payments; employers with a disability employment ratio below 1 percent are permitted to pay 90 percent of the required employment security funds payment.
Enterprises with 30 or fewer in-service staff members will continue to be exempt from disability employment security fund payments.

Companies that meet the requisite disability employment ratios.
January 1, 2023 to December 31, 2027

For more information on tax incentives and preferential policies for companies in the manufacturing industry, see our articles: and .
(This tracker was first published on August 22, 2024, and was last updated on December 27, 2024.)