China’s manufacturing activity grew at its fastest pace in a year in March, with the official purchasing managers’ index (PMI) rising to 50.5, CNBC reports. The improvement signals the impact of Beijing’s stimulus efforts, though escalating US tariffs could threaten further growth.
The National Bureau of Statistics reported that the PMI remained above the 50-mark – indicating economic expansion – after hitting 50.2 in February and recovering from a contraction of 49.1 in January. Production and new orders both improved, with their sub-indexes rising to 52.6 and 51.8, respectively.
Julian Evans-Pritchard, head of China economics at Capital Economics, noted that the results showed China’s exports had “so far remained resilient” in the face of hefty new tariffs imposed by US President Donald Trump’s administration.
[See more: Chinese exports to the lusophone bloc have set a new record]
However, the analyst also said that China’s economy was likely to experience slower growth in the first quarter of 2025 when compared with the fourth quarter last year, due to weaknesses in the services sector and “unflattering base effects.”
China has pledged to boost fiscal and monetary stimulus to achieve a roughly 5 percent gross domestic product (GDP) growth target, through measures that include expanding consumer trade-in programmes and accelerating government debt issuance to ease housing woes and deflationary pressures. Beijing also increased its budget deficit to 4 percent of GDP for 2025, up from 3 percent last year, to counter the impact of tariffs.
Meanwhile, Trump is expected to announce additional levies on Chinese goods on 2 April – potentially further escalating trade tensions between the two countries.
