China's factory activity slowed in April, and Beijing blamed "sharp changes" in the global economy as it struggles with the United States.

In April, U.S. tariffs punishing many Chinese products reached 145%, while Beijing's tax efforts on U.S. imports were 125%. Last month, China's exports soared more than 12% as businesses rush to lead the penalty tariffs.

The lowest reading volume since December 2023, according to the National Bureau of Statistics (NBS), the impact of these measures began to show in official data on Wednesday, with the Purchasing Managers Index (PMI) a key measure of industrial output – down to 49.0 in April.

Anything below the 50-point mark indicates shrinkage.

In a Bloomberg survey, April reads were larger than the forecast of 49.7. It's down from 50.5 in March, the highest number in 12 months.

NBS statistician Zhao Qinghe said in a note that the decline largely comes down to "a sharp change in China's external environment."

Economists warn that trade disruption between the tightly integrated U.S. and Chinese economies could threaten businesses, raise consumer prices and cause a global recession.

“The weak PMI in April was driven by the trade war,” Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note, adding that “the macro data for China and the U.S. will be further weakened as trade policy uncertainty delays business decisions.”

Since the 199th pandemic, China's economy has been working to fully recover and has also struggled to cope with slow domestic demand and protracted property sector crises.

“As external demand cools down, China’s economy is under pressure,” said Zichun Huang, an economist in Capital Economics. Huang added: “While the government is strengthening fiscal support, it is unlikely that this will completely offset the resistance, and we expect the economy to expand by only 3.5% this year.”

Last year, authorities announced a series of positive stimulus measures aimed at increasing growth, including lowering interest rates and easing some home purchase restrictions.

In March, leaders at a key political conference vowed to create 12 million new urban jobs in 2025.

They also say their goal is to grow at 5% this year - same as in 2024, while many economists consider ambitious.

The International Monetary Fund, Goldman Sachs and UBS recently cited their economic growth forecasts for 2025 and 2026, citing the impact of U.S. tariffs. None of them expect the economy to meet Beijing's official growth target.

Arrangements with France and Reuters