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Official manufacturing PMI at 49.0 in April from 50.5 in
March
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Non-manufacturing growth in April slows to 50.4
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Trump's tariffs call time on producers front-loading
shipments
BEIJING, April 30 (Reuters) - China's manufacturing
activity contracted in April, an official factory survey showed
on Wednesday, keeping alive calls for further stimulus as Donald
Trump's "Liberation Day" package of tariffs snapped two months
of recovery.
The official purchasing managers' index (PMI) fell to 49.0
in April versus 50.5 in March, below the 50-mark separating
growth from contraction, and missing a median forecast of 49.8
in a Reuters poll.
U.S. President Trump's decision to single China out for
import duties of 145% comes at a particularly difficult time for
the world's No. 2 economy, which is struggling with deflation
due to sluggish income growth and a prolonged property crisis.
Producers had been front-loading outbound shipments in
anticipation of the duties, driving exports to a five-month high
in March, but the tariff's arrival has now called time on that
strategy.
Policymakers have largely relied on exports to shore up the
fragile economic recovery since the end of the pandemic and only
began to take steps to boost domestic demand more earnestly late
last year.
The non-manufacturing PMI, which includes services and
construction, fell to 50.4 from 50.8 in March.
Analysts expect Beijing to deliver more monetary and fiscal
stimulus over the coming months to underpin growth and insulate
the economy from the tariffs.
China has repeatedly denied it is seeking to negotiate with
the U.S. a way out of the tariffs, and appears to instead be
betting on Washington blinking first. As such, Beijing has
advanced this year's stimulus plans to mitigate the economic
pain of losing, at least temporarily, its biggest customer.
On Monday, the vice head of China's state planner said the
National Development and Reform Commission (NDRC) would roll out
new policies over the second quarter in line with the prevailing
economic conditions of the time.
That followed pledges by the Communist Party's elite
decision-making body, the Politburo, on Friday to support firms
and workers most affected by the duties.
The general consensus among China observers is a second
trade war with the U.S. will significantly weigh on growth, but
the NDRC's Zhao Chenxin said he was confident the country would
achieve its 2025 economic growth target of around 5%.
The International Monetary Fund, Goldman Sachs and UBS all
recently revised down their economic growth forecasts for China
over 2025 and into 2026, citing the impact of U.S. tariffs -
none of them expect the economy to hit Beijing's official growth
target.