According to a recent report, factory activity among China's private firms has expanded at the fastest pace in three years, indicating strong domestic and international demand for Chinese goods. This contrasts with the results of an official government survey that showed a contraction among larger, state-owned manufacturers, highlighting the uneven recovery in the country's economy. The Caixin manufacturing Purchasing Managers' Index (PMI) rose to 51.8 in June, beating market expectations for the sixth consecutive month of improvement. However, the official PMI remained unchanged at 49.5, indicating a second consecutive month of contraction. Analysts believe that the divergence between the two PMIs is due to differences in the sectors covered, with the Caixin survey focusing more on export-oriented and consumer-related companies. Despite strong exports and consumption, manufacturers are less optimistic about the future outlook due to recent tariff announcements from the US and EU, which have dampened sentiment and led to concerns about downward pressure on the economy and intense market competition.