China's March Factory Activity Expands for First Time in Six Months

A woman wearing a face mask checks shoes in a shopping mall in Beijing, China, 31 March 2024. EPA/WU HAO
A woman wearing a face mask checks shoes in a shopping mall in Beijing, China, 31 March 2024. EPA/WU HAO
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China's March Factory Activity Expands for First Time in Six Months

A woman wearing a face mask checks shoes in a shopping mall in Beijing, China, 31 March 2024. EPA/WU HAO
A woman wearing a face mask checks shoes in a shopping mall in Beijing, China, 31 March 2024. EPA/WU HAO

China's manufacturing activity expanded for the first time in six months in March, an official factory survey showed on Sunday, offering relief to policymakers even as a crisis in the property sector remains a drag on the economy and confidence.
The official purchasing managers' index (PMI) rose to 50.8 in March from 49.1 in February, above the 50-mark separating growth from contraction and topping a median forecast of 49.9 in a Reuters poll.
Recent upbeat indicators suggest the world's second-largest economy is slowly getting back on better footing, leading analysts to start upgrading their growth forecasts for the year. Policymakers have wrestled with persistent economic sluggishness since the abandonment of China's strict COVID curbs in late 2022.
"March data show the economy is poised for a strong end to Q1," China Beige Book, an advisory firm, said in a note last week. "Hiring recorded its longest stretch of improvement since late 2020. Manufacturing picked up, as did retail."
However, a deep slump in the Asian giant's property sector remains a major drag on growth, testing the health of heavily indebted local governments and state-owned banks' balance sheets.
The official non-manufacturing PMI, which includes services and construction, rose to 53 from 51.4 in February, marking the highest reading since September.
Premier Li Qiang announced an ambitious 2024 economic growth target of around 5% earlier this month at the annual meeting of the National People's Congress, China's rubber-stamp parliament.
But analysts say policymakers will need to roll out much more stimulus to hit that target as they will not be able to count on the low statistical base of 2022 which flattered 2023 growth data.
Citi on Thursday raised its economic growth forecast for China for this year to 5.0% from 4.6%, citing "recent positive data and policy delivery".
China's cabinet on March 1 approved a plan aimed at promoting large-scale equipment upgrades and sales of consumer goods. The head of the country's state planner told a news conference earlier this month the plan could generate market demand of over 5 trillion yuan ($691.63 billion) annually.
Many analysts worry that China may begin flirting with Japan-style stagnation later this decade unless policymakers take steps to reorient the economy towards household consumption and market-allocation of resources, and away from the heavy reliance on infrastructure investments seen in the past.



Asian Markets Drop as Trump's Tariff Deadline Looms

A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, July 2, 2025. (AP Photo/Ahn Young-joon)
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, July 2, 2025. (AP Photo/Ahn Young-joon)
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Asian Markets Drop as Trump's Tariff Deadline Looms

A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, July 2, 2025. (AP Photo/Ahn Young-joon)
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, July 2, 2025. (AP Photo/Ahn Young-joon)

Most Asian markets fell Monday as countries fought to hammer out trade deals days before Donald Trump's tariff deadline, though investors took heart after he said the levies would not kick in until the start of next month.

While the White House has said several deals were in the pipeline, only two have been finalized ahead of the July 9 cut-off set by the US president, AFP said.

Governments from major trading partners including Japan, India, the European Union and South Korea have fought for the past three months to get agreements.

But Trump said he will send his first tariff letters at 1600 GMT Monday, setting out what Washington will charge for doing business with the United States.

He said an extra 10 percent would be added to any country "aligning themselves with the Anti-American policies of BRICS", an 11-member alliance including Brazil, Russia, India and China.

The announcement came after leaders of the group warned Trump's "indiscriminate" import tariffs risked hurting the global economy.

The deadline for a deal is Wednesday, but Treasury Secretary Scott Bessent confirmed on Sunday that the measures would not be applied until August 1.

"It's not a new deadline. We are saying, this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice," Bessent told CNN.

He said the rates will then "boomerang back" to the sometimes very high levels Trump announced on April 2, before the president suspended the levies to allow for trade talks.

"I would expect to see several big announcements over the next couple of days," Bessent said.

The president told reporters Sunday on Air Force One that "I think we'll have most countries done by July 9, either a letter or a deal", adding that some deals have already been made.

Tariff uncertainty weighed on equity markets, with Tokyo, Hong Kong, Shanghai, Sydney, Wellington and Taipei all down, though there were small gains in Singapore, Seoul, Manila and Jakarta.

Wall Street was closed Friday for a holiday.

"Whether deadlines get extended remains uncertain given Trump's unpredictable style," said IG market analyst Fabien Yip. "Our base case expects several important trade partners to agree on a high-level basis before the deadline.

"This would provide more time for detailed discussions over the following two months. The other risk factor is sector-specific tariffs covering semiconductors, pharmaceuticals, and materials may also be announced in due course."

Oil prices sank after major producers in the OPEC+ alliance said they would boost output far more than expected in August, fueling demand worries just as Trump's tariffs are about to begin.

The group said "a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories" led to the decision to further hike output.