Overview

• China's official Purchasing Managers' Index (PMI) for manufacturing rose to 50.5 in March 2025, the highest in a year, signaling expansion in industrial activity.
• The non-manufacturing PMI, covering services and construction, also improved to 50.8, reflecting broad-based recovery efforts post-Lunar New Year holiday.
• Government stimulus measures, including fiscal and monetary policies, are driving recovery as leaders aim for a 5% growth target in 2025.
• Escalating U.S.-China trade tensions, with new 20% tariffs on Chinese goods and China's retaliatory tariffs, pose risks to export-driven growth.
• China's economy faces additional challenges such as a property sector crisis, deflationary pressures, and weakening external demand, raising concerns about sustained recovery.