Official PMI index for Chinese industry fell to 49.0 points in April. with 50.5 points in March. Official, i.e. government, because in China PMI they have two sources. Apart from the government, Caixin PMI is also published, prepared by S&P Global (such as for Poland). The second one concerns the private sector. The government calculates the National Statistical Office.
China under pressure
The reduction already indicates shortness of breath in factories, and the level itself is important. Reading below 50 means Recession in the sector. The index was there for the first time since January. Economists and analysts expected a decline, but not so deep. The industrial PMI for China has been the lowest in 16 months – from December 2023. In March, the Chinese PMI grew the fastest in a year – but then exporters from this country strongly increased the shipping of goods to make it before entering into force of increased duties in the USA.
“A rapid decrease in PMI probably overestimates the impact of customs tariffs,” says Zichun Huang, China economist at Capital Economics, adding that this “still suggests that he still suggests that China's economy is under pressurebecause external demand is weakening. According to him, this year Chinese GDP will increase by only 3.5 percent. Recall, President Donald Trump decided to impose import duties on China at 145 percent.
Beijing curses reality
Interestingly, just two days before the publication of PMI data on Monday, Chinese officials They tried to alleviate the fears that the customs war from the US will not hurt economic growth. After Donald Trump brought the first commercial works, even a recession appeared on the markets. Later retaliation of Beijing only fueled these fears. China has a problem with improving internal demand in the economy and rely on the export GDP engine.
Meanwhile, Zhao Chenxin, deputy head of the National Development and Reform Commission (NDRC), dealing with planning, said that he was “fully convinced” that he would be able to achieve the goal of GDP for this year. This goal is Economic growth at about 5 percent So like in the previous year and by no means excessively ambitious, although it may prove to be too high, as we explained in the following text:
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“The achievements of the first quarter were laid by a solid foundation for economic development throughout the year,” added Zhao Chenxin. Chinese GDP in the first three months of this year increased by 5.4 percent. year to year, piercing expectations. At the same time, the Chinese statistical office warned that the external environment “is becoming more complex and unfriendly.”