China’s manufacturing sector experienced its fastest growth in a year this month, driven by a surge in new orders, according to a factory survey released on Monday.
The expansion provided some relief to the world’s second-largest economy, which is grappling with mounting trade tensions with the United States.
The latest figures suggested that fiscal measures introduced earlier this year are starting to take effect, supporting China’s $18 trillion economy, reported Reuters.
Additionally, foreign buyers have been rushing to secure orders ahead of potential new trade restrictions from Washington.
The official Purchasing Managers’ Index (PMI) for China’s manufacturing sector climbed to 50.5 in March, up from 50.2 in February, marking the highest level since March 2024.
The reading aligned with forecasts from a Reuters poll. Meanwhile, the non-manufacturing PMI, which includes the services and construction sectors, increased to 50.8 from 50.4.
Escalating Trade Pressures from the U.S
Amid these economic developments, US President Donald Trump is preparing to unveil new “reciprocal” tariffs on Wednesday, targeting what he describes as trade imbalances with China. The move could impose further levies on Chinese goods, adding to the already strained trade relations between the two nations.
Since returning to office in January, Trump has imposed cumulative tariffs of 20 per cent on all Chinese imports, citing Beijing’s inadequate efforts to curb the export of chemicals used in the production of fentanyl, a deadly drug fueling the opioid crisis in the US.
Despite these challenges, China has maintained its 2025 economic growth target at “around 5 per cent.”
To counteract trade pressures, Beijing has pledged additional fiscal stimulus, increased debt issuance, and further monetary easing while emphasising the importance of strengthening domestic consumption.
Also Read : Donald Trump Says Reciprocal Tariffs Will Cover All Nations And Not Just Some Target Countries
Beijing’s Push to Reassure Investors
China’s economy experienced a mixed start to the year. While retail sales have shown signs of improvement, ongoing deflationary pressures and rising unemployment continue to pose challenges.
Seeking to boost confidence among foreign investors, Chinese President Xi Jinping recently met with a group of multinational CEOs, urging them to support global industry and supply chain stability. Similarly, at a high-profile business forum in Beijing earlier this month, Premier Li Qiang called for greater market openness to address “rising instability and uncertainty.”
Meanwhile, Beijing is expanding its “cash for clunkers” consumer goods trade-in program to encourage domestic spending.
