A worker works at a workshop of Zhonghong Packaging Company in Lianyun district, Lianyungang city, East China’s Jiangsu province, on March 27, 2025.
Costfoto | Nurphoto | Getty Images
China’s manufacturing activity expanded at its fastest pace in one year in March, signaling Beijing’s stimulus measures were helping prop up an economic recovery, while looming U.S. tariffs threaten to thwart growth.
The official purchasing managers’ index came in at 50.5 in March, according to the National Bureau of Statistics data released Monday, accelerating from the prior month and in line with Reuters poll estimates.
The PMI figure sprang to above the 50-level threshold — which determines expansion from contraction — in February, coming in at 50.2, from a contraction of 49.1 in January, as production resumed after the Lunar New Year holiday.
The non-manufacturing PMI, which covers services and construction, also rose to 50.8 from 50.4 in February.
Chinese policymakers have pledged to step up monetary and fiscal stimulus push to achieve a growth target of “around 5%” this year and cushion the impact of an escalating trade war with the U.S.
The steps so far have included several rounds of expansion of a consumer goods trade-in scheme to boost domestic consumption and accelerated issuance of government debt to ease housing woes and deflationary pressures.
The latest PMI figure added to a mixed bag of economic data at the start of the year that showed industrial output and fixed asset investment grew more than expected, while consumer inflation fell into negative territory for the first time in a year.
Exports, a lone bright spot in the faltering economy, have lost momentum in the first two months of the year, growing at their slowest rate since April last year, according to LSEG data, as exporters’ front-loading activity to get ahead of new tariffs started to taper off.
U.S. President Donald Trump has levied 20% additional tariffs on Chinese goods in his latest term over the country’s alleged role in illicit fentanyl trade, drawing Beijing’s retaliation with up to 15% tariffs on select U.S. goods, primarily energy and agricultural goods.
Trump is set to unveil his “reciprocal” tariffs designed to address trade imbalances on April 2, potentially hitting Chinese goods with additional duties.
Last week, the U.S. president said he may reduce tariffs on China in exchange for Beijing’s support for a deal that would see TikTok’s Chinese parent company ByteDance sell the short video app to an American company.
The Caixin/S&P Global manufacturing PMI for March, due on Tuesday, is forecast to show manufacturing activity pick up to 51.1 from 50.8 in the prior month.
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