NewsChinese manufacturing hits year-high, U.S. tariffs loom

Chinese manufacturing hits year-high, U.S. tariffs loom

Chinese manufacturing activity in March reached its highest level in a year, indicating the effectiveness of Beijing's stimulus measures. However, impending American tariffs may threaten further growth.

Chinese leader Xi Jinping
Chinese leader Xi Jinping
Images source: © Getty Images | Pool
Przemysław Ciszak

In March, Chinese manufacturing activity grew at the fastest pace in a year, as confirmed by data from the National Bureau of Statistics. The PMI index reached 50.5, indicating expansion compared to February's result of 50.2. According to "CNBC", this growth is a result of Beijing's stimulus measures, although American tariffs may affect future development.

The sub-index of production rose to 52.6, and new orders to 51.8, showing an improvement in supply and demand. However, the employment index fell to 48.2, suggesting difficulties in the labour market. Julian Evans-Pritchard from Capital Economics notes that despite the growth, the economy may slow down in the first quarter due to weaknesses in the services sector.

Challenges for the Chinese economy

Chinese policymakers plan to increase fiscal and monetary stimulus to achieve a growth target of around 5 per cent by 2025.

An increase in the budget deficit to 4 per cent of GDP is intended to help mitigate the effects of the trade war with the USA. However, impending tariffs may impact exports, posing a challenge to the Chinese economy.

Related content