China’s factory activity slipped into the worst contraction since December 2023, revealing early damage to the world’s second-biggest economy from the trade war with the US.The official manufacturing purchasing managers’ index was 49 compared with 50.5 in March, the National Bureau of Statistics said Wednesday. That was much lower than the median forecast of 49.7 by economists. Any number above 50 points to an expansion. The non-manufacturing measure of activity in construction and services fell to 50.4 from 50.8 last month. That compares with a forecast of 50.6.
The latest PMI readings offer the first official look at the health of China’s economy after the Trump administration imposed sweeping tariffs of 145% on Chinese products, a level expected to hurt a sector that contributed to nearly a third of the economy’s growth last year.
In an early warning sign for China’s exporters, cargo shipments have plunged, possibly by as much as 60%, according to one estimate. Economists at banks including UBS Group AG and Goldman Sachs Group Inc. have lowered their forecasts for China’s 2025 growth to around 4% or lower in recent weeks.To help ease the pressure on exporters, Beijing this week laid out plans to help struggling firms access loans and to boost domestic consumption, but stopped short of announcing more aggressive economic stimulus. Instead, officials are focusing on executing the stimulus package approved in early March.
The latest PMI readings offer the first official look at the health of China’s economy after the Trump administration imposed sweeping tariffs of 145% on Chinese products, a level expected to hurt a sector that contributed to nearly a third of the economy’s growth last year.
In an early warning sign for China’s exporters, cargo shipments have plunged, possibly by as much as 60%, according to one estimate. Economists at banks including UBS Group AG and Goldman Sachs Group Inc. have lowered their forecasts for China’s 2025 growth to around 4% or lower in recent weeks.To help ease the pressure on exporters, Beijing this week laid out plans to help struggling firms access loans and to boost domestic consumption, but stopped short of announcing more aggressive economic stimulus. Instead, officials are focusing on executing the stimulus package approved in early March.
Beijing also appears in no rush to negotiate with Washington. Foreign Minister Wang Yi warned countries against caving in to US tariffs threats, saying that appeasement will only embolden the “bully.”
