China’s factory activity expands at fastest pace in a year, official survey shows
A worker works at a workshop of Zhonghong Packaging Company in Lianyun district, Lianyungang city, East China’s Jiangsu province, on March 27, 2025.
Costfoto | Nurphoto | Getty Images
China’s manufacturing activity expanded at its fastest pace in one year in March, indicating that Beijing’s stimulus measures were effective in supporting an economic recovery. However, the growth is threatened by looming U.S. tariffs.
The official purchasing managers’ index for March was reported at 50.5 by the National Bureau of Statistics, surpassing expectations and showing acceleration from the previous month. This aligns with estimates from a Reuters poll.
The PMI figure crossed the 50-level threshold in February, signaling expansion after a contraction in January due to production resuming post the Lunar New Year holiday.
Additionally, the non-manufacturing PMI, which includes services and construction, also saw an increase to 50.8 from 50.4 in February.
Chinese policymakers are committed to boosting monetary and fiscal stimulus to achieve a growth target of “around 5%” this year and to mitigate the impact of the escalating trade tensions with the U.S.
The measures taken so far include expanding a consumer goods trade-in scheme to stimulate domestic consumption and accelerating government debt issuance to address housing challenges and deflationary pressures.
The latest PMI data adds to a mixed bag of economic indicators at the beginning of the year. While industrial output and fixed asset investment exceeded expectations, consumer inflation turned negative for the first time in a year.
Exports, which have been a bright spot in the struggling economy, showed a slowdown in the first two months of the year, growing at the slowest rate since April last year. This was attributed to exporters reducing front-loading activities ahead of new tariffs.
U.S. President Donald Trump imposed additional tariffs on Chinese goods in response to alleged illicit fentanyl trade, prompting retaliatory measures from Beijing, including tariffs on select U.S. goods.
Trump is expected to announce reciprocal tariffs on April 2 to address trade imbalances, potentially impacting Chinese goods. He also hinted at reducing tariffs in exchange for support on a deal involving the sale of TikTok.
The upcoming Caixin/S&P Global manufacturing PMI for March is forecasted to show a pickup in manufacturing activity from the previous month.
This is a developing story. Stay tuned for updates.
