China's Manufacturing Activity Slows Amid Rising Oil Prices from Iran Conflict

China's manufacturing sector contracted in May as rising oil prices stemming from the Iran conflict weighed on the world's second-largest economy. Although China has been relatively insulated from the worst impacts of the conflict due to its substantial crude oil reserves and diversified energy sources, the factory data demonstrates that elevated energy costs are still affecting economic activity. Economists have noted that while global demand for data centers has kept exports strong—even exceeding last year's record levels—the domestic consumer economy is struggling, evidenced by plummeting pork prices amid oversupply and subdued consumer spending. This mixed picture has sparked speculation about potential broad stimulus measures from Beijing, though policymakers appear reluctant to intervene given the resilience of export sectors.