Manufacturing in China Declines Further as Exports Slump
The manufacturing PMI in China stood at 48.2 in April 2025, marking the worst level since 2020. This was a consequence of weak export orders and challenges in the real estate market despite the stimulatory efforts of Beijing.
Weakness in Exports
Exports to the US and Europe dropped by 8%, while there were no changes in demand from ASEAN nations. Additionally, electronics shipments have been negatively affected by AI firms moving their manufacturing operations to other Asian countries.
Policy Measures at Home
The one-year loan prime rate in China was cut to 3.3% and a package of RMB 1 trillion worth of infrastructure bonds was announced to boost confidence and spur economic growth.
Forecast
The forecast indicates that China's economy will grow by 4.3% in 2025 compared to the target set by the government.
Conclusion
The ongoing difficulties in manufacturing in China show that the nation still has not transitioned from its reliance on investments to consumer spending.