Chinese manufacturing surges, but U.S. tariffs loom large
Chinese manufacturing activity in March reached its highest level in a year, indicating the effectiveness of Beijing's stimulus measures. However, upcoming American tariffs may threaten further growth.
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, signaling 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 increased to 51.8, indicating an improvement in supply and demand. However, the employment index fell to 48.2, suggesting difficulties in the labor market. Julian Evans-Pritchard from Capital Economics notes that despite the growth, the economy may slow down in the first quarter due to weakness 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 percent by 2025.
An increase in the budget deficit to 4 percent of GDP is intended to help mitigate the effects of the trade war with the USA. However, upcoming tariffs may impact exports, posing a challenge to the Chinese economy.
