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Economic News

China: PMIs Rise as Exporters Try to Beat the Tariffs

March 31, 2025
Marc-Antoine Dumont
Senior Economist

Highlights

  • China’s composite PMI was up 0.3 points in March, from 51.1 to 51.4.
  • The manufacturing index increased to 50.5 in March, its highest level in a year. The production and new orders components also rose to 52.6 and 51.8, respectively.
  • The non-manufacturing index continued to advance, rising to 50.8 in March. The construction index also posted a solid gain of 0.7 points to 53.4.

Comments

China’s composite PMI looks to have resumed an upward trend in March after four volatile months, as both the manufacturing and non-manufacturing components edged up. However, these gains could be short-lived, as the expansion in the manufacturing sector is likely due to exporters fast-tracking orders to get ahead of the Trump administration’s tariffs. China is already contending with a combined 20% in new tariffs imposed by the US on February 4 and March 4, but fears of further increases remain. This is apparent given the rise in the new orders index and the decline in the operation expectations index.

On the construction side, stimulus measures from the central government and some stabilization in China’s property market helped the index climb 0.7 points in March. The multitude of infrastructure projects announced but not yet started should underpin this index in the coming months. 

Implications

China’s economy seems to be benefiting from the frontloading of exports to get ahead of any new US tariffs. That said, the underlying issues—high debt, the property crisis and low confidence—continue to take a toll. While the property market is gaining some traction, and the non-manufacturing PMI suggests improved domestic demand, economic growth remains fragile. The trade war is also a major downside risk. As a result, we still expect real GDP growth to slow from 5.0% in 2024 to 4.6% in 2025.

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