China: Factory Activity Recorded Worst Recession Since December 2023

Factory activity in China recorded its worst recession since December 2023, revealing the damage to the world’s second-largest economy from trade tensions with the United States.

The Chinese news agency, Xinhua, quoted data from the National Bureau of Statistics of China released today, stating that the Purchasing Managers’ Index (PMI) for the manufacturing sector in China fell to 49.0 in April, compared to 50.5 in March, a decrease of 1.5 percentage points and below the median forecast of 49.7. Any reading below 50 indicates a contraction.

The Purchasing Managers’ Index (PMI) for the non-manufacturing sector in China fell to 50.4 in April from 50.8 in the previous month, a decrease of 0.4 percentage points from the previous month. The two indicators provide the latest official view of the state of the Chinese economy, after the administration of US President Donald Trump imposed a comprehensive 145% tariff on Chinese products, a rate expected to harm a sector that contributed to about a third of China’s economic growth last year. Trade tensions between the world’s two largest economies have escalated since the US president launched a broad tariff campaign against Chinese goods, prompting Beijing to retaliate with 125% tariffs on US products.