China's factory activity contracted in March for export-oriented manufacturers as costs spiked, according to a private Caixin survey. The downturn contrasts with official data showing manufacturing expansion, highlighting growing pressure on exporters from the Iran war. Export-focused firms reported rising input costs and weakening demand, signaling potential challenges for China's manufacturing sector.

While the official PMI suggested resilience in manufacturing, the Caixin survey painted a different picture for companies reliant on international trade. The divergence between gauges reflects mounting pressure from geopolitical tensions and supply chain disruptions. Export-oriented manufacturers, which form a crucial part of China's economy, faced particular strain as costs surged.

The contrasting data points underscore the uneven impact of global events on China's industrial sector. As the Iran war continues to drive up costs for exporters, the manufacturing outlook remains uncertain. The Caixin survey's findings suggest that while some parts of China's manufacturing sector may be weathering global headwinds, export-dependent firms are feeling the squeeze.