Chinese netizens are getting a little screechy in their calls for "stimulus now!"
From Reuters, April 29 (30):
BEIJING, April 30 (Reuters) - China's factory activity contracted at the fastest pace in 16 months in April, a factory survey showed on Wednesday, keeping alive calls for further stimulus as Donald Trump's "Liberation Day" package of tariffs snapped two months of recovery.The reading contrasts with Chinese officials' conviction that the world's second-largest economy is well placed to absorb the U.S. trade shock and suggests domestic demand remains weak as factory owners struggle to find alternative buyers overseas.Manufacturers had been front-loading outbound shipments in anticipation of the duties, but the arrival of the levies has called time on that strategy - putting pressure on policymakers to finally address rebalancing the economy.China's official purchasing managers' index (PMI) fell to 49.0 in April versus 50.5 in March, according to the National Bureau of Statistics (NBS), the lowest reading since December 2023 and missing a median forecast of 49.8 in a Reuters poll.The non-manufacturing PMI, which includes services and construction, fell to 50.4 from 50.8, but remained above the 50-mark separating growth from contraction."The sharp drop in the PMIs likely overstates the impact of tariffs due to negative sentiment effects, but it still suggests that China’s economy is coming under pressure as external demand cools," Zichun Huang, China Economist at Capital Economics, said. "Although the government is stepping up fiscal support, this is unlikely to fully offset the drag, and we expect the economy to expand just 3.5% this year."
The line chart shows China's official manufacturing and non-manufacturing PMI.Huang added that negativity among the survey's respondents "probably exaggerates the impact of the tariffs," noting that "the new export orders index dropped back to its lowest level, COVID-19 disruptions aside, since April 2012."....
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