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3w ago

China's Factory Activity Hits Year-High as U.S. Tariffs Loom

March 2025 saw China's manufacturing PMI rise to 50.5, signaling recovery, but escalating U.S. tariffs and structural challenges threaten sustained growth.

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Employees work at a ceramics factory where the workers start their shifts before dawn to optimise sunlight and save energy, in Citta di Castello, Italy, August 30, 2022. REUTERS/Jennifer Lorenzini/File photo
FILE - A container ship is loaded and unloaded at a container terminal at a port of Kawasaki near Tokyo on March 9, 2022. (AP Photo/Koji Sasahara, File)
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Overview

  • China's manufacturing PMI reached 50.5 in March 2025, its highest in a year, indicating expansion in factory activity.
  • Non-manufacturing PMI, covering services and construction, also improved to 50.8, reflecting broader economic recovery efforts.
  • The U.S. has imposed 20% tariffs on Chinese goods, with additional reciprocal tariffs expected on April 2, creating significant risks for China's export sector.
  • Government stimulus measures, including fiscal spending and consumer trade-in programs, have supported recovery but face challenges from weak consumer confidence and a property sector crisis.
  • Economists warn that Q2 2025 may see manufacturing slow due to weakening global demand and the impact of escalating trade tensions.