China: Manufacturing PMI Dips – Grim Outlook for Industry

The aggressive trade war between China and the U.S. continues to weigh heavily on China’s economy. Amidst this trade conflict, prospects for industrial production are dimming in China. The official Purchasing Managers’ Index (PMI) for the manufacturing sector dropped more sharply than expected in March, from 50.5 units in March to 49 in April, according to China’s National Bureau of Statistics on Wednesday (April 30, 2025). This index is a key indicator for industrial production, business orders, and the overall economy. A reading below 50 indicates troubling prospects. The non-manufacturing PMI, covering services and construction, also weakened, signaling ongoing deterioration in China’s industrial landscape. Currently, China and the U.S. are embroiled in an aggressive trade war. Under President Donald Trump, the U.S. government imposed tariffs totaling 145% on Chinese imports, severely impacting China’s export-driven industry. In retaliation, China has levied 125% tariffs on U.S. imports and announced stricter controls on rare earth exports. Despite recent rhetorical progress between the two governments, harsh measures remain in place. Experts even speak of a potential decoupling of the world’s two largest economies. According to these experts, the latest data from Beijing shows the initial damage caused by Trump’s tariff policies. “It’s definitely worse than expected. The data shows that tariffs are starting to have an impact,” said Robin Xing, Chief China Economist at Morgan Stanley.