China’s manufacturing sector contracted in April, reversing gains from the previous month, as escalating trade tensions with the United States weighed heavily on industrial activity, according to official data released on Wednesday.
The country’s Purchasing Managers’ Index (PMI), a key indicator of manufacturing performance, declined to 49 in April, falling below the 50-point threshold that separates expansion from contraction. The reading marks a notable drop from March’s 50.5, which had been the highest level recorded in 12 months.
The April figure also came in lower than market expectations, with a Bloomberg survey forecasting a more moderate decline to 49.7.
The National Bureau of Statistics (NBS) attributed the downturn to a combination of factors, including a high comparative base due to previous robust output and a significantly altered global trade environment.
“In April, affected by factors such as a high base from earlier rapid manufacturing growth and a sharp shift in the external environment, the manufacturing PMI fell,”
said Zhao Qinghe, a senior statistician at the NBS.
The latest figures follow the implementation of heightened US tariffs of up to 145% on a wide range of Chinese goods, a move to which Beijing responded with retaliatory tariffs of up to 125% on imports from the United States. These developments mark a deepening of the ongoing trade dispute between the world’s two largest economies.
Meanwhile, China’s non-manufacturing PMI, which tracks activity in the services sector, also softened in April, falling to 50.4 from 50.8 in March, indicating slower growth momentum across the broader economy.
Despite a 12.4% year-on-year surge in Chinese exports in March — driven largely by firms seeking to pre-empt the latest tariff measures — the broader economic outlook remains uncertain. Analysts warn that sustained disruption to trade flows between the US and China could lead to increased costs for consumers, pressure on businesses, and potential spillover effects on the global economy.
China continues to contend with a complex domestic environment, including sluggish consumer demand and a protracted downturn in the property sector. Although authorities introduced a series of stimulus measures in 2023, including interest rate cuts and the easing of homebuying restrictions, signs of a durable recovery remain limited.
At a key political meeting in March, Chinese leaders reaffirmed their commitment to economic stabilisation, targeting the creation of 12 million new urban jobs in 2025 and maintaining a GDP growth target of 5%. However, economists caution that achieving this objective will be challenging in the face of mounting external and internal pressures.
–Free Malaysia Today
