ECONOMY

Tariffs Smother China’s Services Sector Expansion, Caixin PMI Shows

Published: May. 6, 2025 9:45 a.m. GMT+8

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Activity in China’s services sector saw a muted expansion in April, with demand growing at the lowest rate since December 2022 and optimism weakening significantly, as the impact of the intensified China-U.S. trade war began to be felt, a Caixin-sponsored survey published Tuesday shows.

The Caixin China General Services Business Activity Index, which provides an independent snapshot of operating conditions in industries such as retail and tourism, came in at 50.7 in April, down 1.2 points from the previous month.

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China's services PMI fell to 50.7 in April, signaling muted expansion with the slowest demand growth since December 2022; optimism weakened sharply.
Employment in the sector contracted for a second straight month, and price pressures rose while sales prices fell for a third month.
China introduced a record 5.66 trillion yuan budget deficit for 2025 to spur domestic demand amid ongoing impacts from increased U.S. tariffs.

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Who’s Who

Caixin: Caixin is an independent Chinese media group known for its in-depth reporting and analysis of economics, finance, and business. It publishes influential economic indexes, such as the Caixin China General Services Business Activity Index (services PMI) and the Caixin China General Composite PMI, which are early indicators of economic performance in China, particularly in the manufacturing and services sectors.

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