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China Manufacturing Activity Shrinks On Weak Exports
(RTTNews) - China's manufacturing activity contracted in April as tariff threats damped export orders, official purchasing managers' survey data from the National Bureau of Statistics revealed Wednesday.
The official manufacturing PMI slid to 49.0 in April from 50.5 in March. This was the lowest score in 16 months and also remained below forecast of 49.7.
The non-manufacturing PMI posted 50.4 in April, down from 50.8 in the previous month. The expected level was 50.6.
Elsewhere, private PMI survey suggested that the manufacturing sector grew at the slowest pace since January. The Caixin factory PMI dropped to 50.4 in April from 51.2 in March.
"The ripple effects of the ongoing China-U.S. tariff standoff will gradually be felt in the second and third quarters," Caixin Insight Group Senior Economist Wang Zhe said. "As such, policymakers should be well prepared, with action taken sooner rather than later," the economist added.
Although the fall in the PMIs likely overstates the impact of tariffs due to negative sentiment effects, it still suggests that China's economy is coming under pressure as external demand cools, Capital Economics economist Zichun Huang said.
While the government is stepping up fiscal support, this is unlikely to fully offset the drag from exports, and the economy is likely to expand just 3.5 percent this year, the economist noted.
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