China Factory Activity Growth Slows Again as Trump Tariffs Loom
China’s manufacturing activity unexpectedly declined for a second straight month in January, underlining the need for Beijing to step up economic stimulus with Donald Trump slapping tariffs on the country’s exports.
The Caixin manufacturing purchasing managers index fell to 50.1 from 50.5 in December, according to a statement released by Caixin and S&P Global on Monday. While any reading above 50 indicates an expansion of activity, the figure was well below the median forecast of 50.6 by economists surveyed by Bloomberg.
The results of the private survey compare with last month’s sharp drop in the official manufacturing PMI, which showed activity contracted more than expected and fell to the lowest since August.
The findings reinforce the urgency for Beijing to stump up more money — especially by way of public borrowing and spending — to plug a hole in demand. The calculus is increasingly shifting after Trump imposed a 10% levy on Chinese exports, a growth driver for the world’s second-largest economy last year.
An earlier-than-usual Lunar New Year — around which many factories and companies shut down - may have also played a role in China’s economic slowdown at the start of 2025 as millions of workers returned to their hometowns when the holiday began last week.
The Caixin results have been largely stronger than those from the official poll over the previous year as exports stayed strong. The two surveys cover different sample sizes, locations and business types, with the private poll focusing on small and export-oriented firms.
Source : Bloomberg
