1st April 2026: March PMI

RUI: China’s Manufacturing Purchasing Manager’s Index—or PMI—surged by 1.4 percentage points to 50.4 in March, above the critical threshold which indicates expansion. The non-manufacturing PMI also reached expansion territory, jumping by 0.6 percentage points.

XINHE: The surge recorded in March is the largest single month increase for the manufacturing PMI in over a year. This expansion was largely driven by strong new order growth, with the respective PMI jumping by 3 percentage points to 51.6. The PMI for new export orders rose by 4.1 percentage points, yet remained in contraction territory at 49.1.

The PMI for factory prices continued its upward trend, surging by 4.8 percentage points to 55.4. This is especially noteworthy since factory gate price deflation has been a longstanding issue for companies in China. Efforts by Chinese authorities to combat this finally seem to be paying off.

Non-manufacturing business activity, which is made up of construction and services, also recovered in March with the respective PMI rising by 0.6 percentage points and settling just above the expansion threshold at 50.1. The construction sector PMI rose by 1.1 percentage points to 49.3, just below the threshold. The services sector returned to expansion in March with a 0.5 percentage point rise to 50.2.

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RUI: China’s industrial enterprises recorded strong results in the January to February period, with total profits rising 15.2 per cent year-on-year, reaching 1,025 billion yuan.

XINHE: This overall rise in profits was led by the manufacturing sector, which saw its profits increase by 18.9 percent year-on-year in the January to February period. The mining sector, which suffered from a prolonged slump in commodity prices, also experienced a notable recovery, with profits rising by 9.9 percent year-on-year.

At the industry level, the computer, communication and other electronic equipment manufacturing industry saw a twofold profit increase followed by the non-ferrous metal smelting and rolling processing industry which saw a 1.5-fold increase. An outlier in this trend is the automotive industry, which experienced a 30.2 percent year-on-year decline in its profits in the January to February period.

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RUI: A delegation of lawmakers from the European Parliament embarked on a three-day trip to China on 31^st March, marking the first such visit in eight years.

XINHE: The delegation, which represents the EU Parliament’s internal market committee, is travelling to China on the invitation of the legislative affairs commission of the National People’s Congress. They will visit Beijing and Shanghai and meet with the chairperson of the Standing Committee of the National People’s Congress, among others. Both the EU delegation and their Chinese counterparts emphasised the desire for increased cooperation, especially regarding safeguarding the international trading regime.

Before the visit, the head of the EU Parliament’s delegation called upon Chinese companies to comply with EU product safety standards, referring to an ongoing EU investigation into large volumes of small parcels shipped through Chinese online marketplaces.

On 1^st April 2026, European Chamber representatives led by Secretary General Adam Dunnett met with the EU Parliament delegation. Dunnett provided an overview of the key concerns and recommendations of European industry in China as reflected in the Chamber’s last Position Paper. The discussion and Q&A session focused on a variety of topics, from the structural issues impacting the Chinese economy and the expectations on the Fifteenth Five-Year Plan, to Intellectual Property Rights (IPR) protection, E-Commerce and consumer trends in China. Both sides also discussed the development trajectory of Artificial Intelligence (AI) technologies, strategies and policies in China, with Chamber representatives advocating for further EU-China exchanges with an aim to develop harmonised AI governance and safety frameworks.

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RUI: On 25^th March, the European Parliament and Council of the EU agreed on a reform of the European Customs Union, which will include provisions to address challenges brought on by the growth in e-commerce.

XINHE: The new agreement will establish an EU Customs Authority which will, among other duties, manage an integrated Customs Data Hub for customs operations in the EU. The customs exemption on parcels below 150 euros—a rule that was previously used by e-commerce companies to ship relatively low-value goods without incurring duties—was also removed. These new rules will allow member countries to impose fines on e-commerce companies, which import non-compliant goods into the European Union.

This comes on the heels of multiple investigations into Chinese and other foreign e-commerce companies, which were alleged to have imported non-compliant and dangerous goods into the EU.

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RUI: Join the European Chamber’s launch event for its latest publication, Exporting Control: China’s New Strategic Toolkit, on 14^th April 2026.

XINHE: The report focuses on the development of China’s export control regime and future scenarios in which this evolving toolkit may be applied to influence strategic competition. The event will feature a presentation by the Chamber’s President, Jens Eskelund, followed by a panel discussion on the main findings of the report.

RUI: You can find more information by visiting the link in the description.

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RUI: Thanks for listening, and don’t forget to tune in next week.

XINHE: In the meantime, please find useful links in the episode notes.

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