For the first time in three months, China's manufacturing activity contracted in April, amid escalating trade tensions with the United States. With the fall of export demand and factory output, this marks its weakest performance since mid-2023. Meanwhile, China released a video saying it won't "kneel down" to the U.S.
What Happened: The official manufacturing Purchasing Managers' Index (PMI) fell to 49.0. This figure fell short of analyst expectations and slipped below the neutral 50 mark that distinguishes growth from contraction, according to data from the National Bureau of Statistics, cited by CNBC.
Sub-indexes for production and new orders both fell, with raw material and output prices also taking a hit. China's non-manufacturing PMI also suffered a blow, while employment declined across most sectors.
Despite this, the Chinese Foreign Ministry asserted its position by releasing an English-language video with Chinese subtitles that, without naming President Donald Trump, portrayed the U.S. as an aggressive global actor other nations should be wary of appeasing. "Bowing to a bully is like drinking poison to quench thirst — it only deepens the crisis," the narrator says, adding, "History has proven that compromise won't earn you mercy — kneeling only invites more bullying. China won't kneel down."
See Also: China Breaks Silence On Tariff Impact, Says Trump Policies Are Hurting Its Airlines And Boeing
Why It Matters: The manufacturing slowdown comes after Trump imposed new tariffs amounting to a total of 145% on Chinese imports. China, in retaliation, has imposed 125% tariffs. Analysts noted that these tit-for-tat measures have significantly disrupted trade flows, with a major drop in container traffic between the two nations.
To deal with the fallout, Beijing has implemented targeted tariff exemptions and moved to enhance fiscal support, but economists warn that current stimulus measures may not be enough.
Major banks have demoted China's 2025 growth outlook, but its government maintains its 5% Gross Domestic Product target.
Trump recently hinted that he expects tariffs on Chinese products to be relaxed, while Treasury Secretary Scott Bessent said the current levels are "unsustainable." However, Trump also made clear that any withdrawal would come only after a comprehensive proposal from Beijing. China has repeatedly denied that any formal trade negotiations are underway, even though the Trump administration has claimed otherwise.
As Bessent negotiates with 17 other countries dealing with U.S.-imposed tariffs, China calls the U.S. a "paper tiger," and says: "We know standing up for ourselves keeps the possibility of cooperation alive…China won't back down so the voices of the weak will be heard, bullying will be stopped and justice will not disappear from the world." Earlier this month, China’s Ministry of Commerce issued a similar statement.
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