China signals economic slowdown as manufacturing growth slows

In late April 2025, economic indicators from China suggested a deceleration in manufacturing growth relative to the previous month, as unveiled by recent trade data. March had seen a front-loaded surge in orders spurred by impending tariffs, but this trend reversed in April, with new export orders experiencing a marked decline due to tariff uncertainties affecting purchasing decisions. Concurrently, the Caixin survey indicated year-over-year expansion despite headlines proclaiming a significant slowdown. These mixed signals point to the growing influence of tariff-related issues and overall economic conditions on manufacturing performance. In the broader Asian market, equities showed varied performance, with Thailand and the Philippines leading gains, while Pakistan and Korea lagged. Hong Kong experienced a notable uptick amid reports indicating changes in capital flows, particularly the resurgence of southbound investments from Mainland China. April marked a high point for inflows, averaging around $1 billion per day, thereby hinting at a shift between stock performances on both sides of the Pacific. Corporate responses to these changing dynamics are also significant. Alibaba launched its new "Instant Commerce" segment within the TaoBao app, aiming to enhance competition in the delivery services space, particularly against Meituan. Through this initiative, Alibaba aims to capitalize on the growing demand for instant delivery services, which could alter the competitive landscape for both local and international players. Moreover, this highlights a potential shift in consumer behavior as more individuals gravitate towards platforms that offer immediate product availability. Political leadership in China also showcased engagement with the technology sector, as President Xi Jinping met with representatives of AI companies at the SMC Shanghai Foundation Model Innovation Centre. This event, which included foreign researchers, signifies China's aspirations of a leading role in the emerging AI market and may serve to attract foreign talent to bolster the country's technological advances. The implications of these interactions could have lasting effects on both domestic and global technologies and economic relationships.