Prolonged weakness in China’s manufacturing sector is showing the urgency behind this week’s deal between President Xi Jinping and President Donald Trump that reduced tariffs on made-in-China products.
Factory activity slumped for the longest streak in more than nine years in October, with the official manufacturing purchasing managers’ index dipping more than expected to 49. That suggests activity dropped the most in six months just before the leaders’ meeting stabilized ties. New orders shrank the most since 2023 as demand took a hit from trade barriers and weak sentiment at home.
While the trade deal may provide some relief to manufacturers, weak domestic demand and uncertainties in US-China relations will continue to cast a shadow over their outlook — and the economy. Net exports make up nearly a third of China’s growth this year. Although the economy is on track to reach the annual expansion target of around 5%, partly because companies have found new customers outside the US, many analysts predict the final three months of 2025 will see the slowest performance since zero-Covid lockdowns roiled production in 2022.
Nvidia forged a landmark deal to supply its technology to South Korea’s biggest companies, part of an aggressive push to expand AI infrastructure around the world. Under agreements brokered with the country’s Ministry of Science and a trio of corporations — Samsung Electronics, Hyundai Motor and SK Group — Nvidia will be supplying more than 260,000 of its accelerator chips to help jump-start Korean AI projects. Financial terms weren’t disclosed. The tie-ups in South Korea will help further entrench Nvidia’s equipment in a country with a vibrant technology industry.
Separately, Nvidia CEO Jensen Huang still hopes to sell chips from the company’s Blackwell lineup to customers in China, though he has no current plans to do so, he told reporters Friday. Blackwell is Nvidia’s latest generation of AI semiconductors, figuring prominently as a potential bargaining chip in trade talks between the US and China.
