China's April Purchasing Managers' Index Hits 7-Month Low Due to Tariff Impact

Caixin Services PMI Drops to 50.7
Falls to Seven-Month Low Amid US Tariff Pressure

The Caixin Services Purchasing Managers' Index (PMI), published by Chinese financial information provider Caixin, has fallen to its lowest level in seven months, impacted by high tariffs imposed by the United States.

According to Caixin, Bloomberg, and Reuters on May 6, the services PMI for April was 50.7, down 1.2 points from the previous month's 51.9, marking the lowest level since September of last year.

This figure was also well below the median forecast of 51.8 from a Bloomberg survey of economists.

This index, compiled by Caixin based on surveys of purchasing managers at service companies, indicates economic expansion when above 50 and contraction when below 50.

The Caixin services PMI moved in line with the official April services business activity index released by China's National Bureau of Statistics, which fell by 0.2 points from the previous month to 50.1.

The Caixin PMI is regarded as a better indicator of economic trends among export-oriented and smaller companies.

This latest reading demonstrates that, despite China's economy showing stronger-than-expected performance in the first quarter thanks to stimulus measures, it continues to struggle due to persistent risks of deflation (falling prices amid economic slowdown), the prolonged real estate slump, and ongoing tariff threats from the United States.

Wang Zhe, a Caixin economist, analyzed, "As a dark cloud hangs over market expectations, both corporate and consumer confidence have declined, making it more difficult to boost domestic demand." He added, "The impact of the US-China tariff war will become increasingly evident in the second and third quarters."