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Staff members work at a workshop of Xuzhou Construction Machinery Group Co., Ltd. (XCMG) in Xuzhou City, east China's Jiangsu Province, on March 25, 2026. (Xinhua/Cheng Li)

BEIJING, April 30 (Xinhua) -- China's manufacturing sector remained in expansion for the second consecutive month in April, with small and medium-sized enterprises (SMEs) returning to growth territory, signaling that policy support is gradually taking effect.

The purchasing managers' index (PMI) for China's manufacturing sector stood at 50.3 this month, down 0.1 percentage points from March but still above the 50-mark that separates expansion from contraction, according to data released Thursday by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing.

Huo Lihui, a chief statistician at the NBS, said the index remained above the critical threshold for two consecutive months, with the manufacturing sector maintaining a generally stable and positive operational trend.

Thursday's data showed a notable rebound in the business sentiment of small and medium-sized enterprises (SMEs).

"SMEs are more directly driven by external demand, and their improved performance reflects resilient export competitiveness," said Wen Bin, chief economist at China Minsheng Bank.

The PMI for medium-sized enterprises rose 1.5 percentage points to 50.5, returning to expansion after 15 consecutive months below the threshold. Small enterprises posted a PMI of 50.1, up 0.8 percentage points, ending a 23-month streak of contraction, Wen noted.

The new export orders sub-index climbed 1.2 percentage points to 50.3, moving into expansion terrain for the first time in 23 months, the data revealed.

High-tech manufacturing and equipment manufacturing continued to lead the recovery, with their PMI readings at 52.2 and 51.8, respectively, up a 0.1 and 0.3 percentage points from March. In contrast, the PMI for energy-intensive industries fell by 1 percentage point to 47.9.

"High-tech and equipment manufacturing, as new drivers of growth, continue to outperform, while traditional heavy industries face headwinds," Wen said, pointing to the ongoing structural transformation of China's economy.

The production sub-index edged up 0.1 percentage points to 51.5, while the new orders index declined 1 percentage point to 50.6, suggesting that domestic demand remains relatively soft compared to external orders.

The sub-index for raw material purchase prices remained elevated at 63.7, while the factory-gate price index was 55.1, indicating notable increases in overall manufacturing sector prices.

Despite price pressures, business confidence strengthened further in April. The index for production and business activity expectations rose for the third straight month, climbing 1.1 percentage points to 54.5, with Huo stating that "market expectations have continued to strengthen and manufacturers' confidence in the near-term market outlook keeps improving."

A Tuesday meeting held by the Political Bureau of the Communist Party of China Central Committee described the economy's start to the year as "robust" and "with key indicators beating expectations," while calling for implementing a more proactive fiscal policy and applying an appropriately accommodative monetary policy in a targeted and effective way.

"Policy will largely maintain its current framework and intensity," Wen said, adding that the government will focus on making full use of existing measures to support infrastructure, stabilize the property market and expand domestic demand.

Thursday's data also showed that the PMI for China's non-manufacturing sector came in at 49.4 in April, down 0.7 percentage points from the previous month.

Looking ahead, Wen expects the economy to sustain stable growth in the second quarter, underpinned by resilient external demand and the continued release of policy effects.