China factory activity expands at fastest pace in a year

March 31, 2026 / 12:42 PM

Sharjah24 - AFP: China's factory activity expanded in March at its quickest pace in a year, official data showed on Tuesday, ending a two-month slump as production picked up after the annual Spring Festival holiday. The world's second-largest economy has been struggling with a slowdown in domestic demand and investment in recent years that has weighed on its vast manufacturing sector.

Despite this, the manufacturing purchasing managers' index (PMI) – a key measure of industrial health – rose to 50.4 in March, according to the National Bureau of Statistics (NBS). That figure was up from 49.0 in February and 49.3 in January, and beat a forecast of 50.1 in a Bloomberg survey of economists. It is the highest since March 2025 when the PMI was 50.5.

Production and demand strengthen

There was an acceleration in the production activities of manufacturing enterprises and a marked improvement in market demand, Huo said. China's non-manufacturing PMI – a gauge of activity across services and construction – was 50.1 in March, an improvement from February's slump of 49.5.

Resilience amid global uncertainty

The data has underscored some resilience in China's economy despite the uncertainty that the raging Middle East war has brought about, after US-Israeli strikes on Iran triggered Tehran's retaliation that sharply restricted access to the Strait of Hormuz. The waterway is a critical shipping route for energy resources, and the situation has caused global oil prices to soar, triggering fears for the world economy.

Strong trade performance supports growth

China's trade surged by a fifth in the first two months of the year, official data showed earlier this month, significantly outpacing forecasts despite a plunge in shipments to the United States. The country also achieved a record trade surplus last year, offering a crucial lifeline for Beijing as domestic activity slumped.