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China Caixin Services PMI Rises to Three-Month High 51.9; Hang Seng Index Reacts

By:
Bob Mason
Updated: Apr 3, 2025, 10:13 GMT+00:00

Key Points:

  • China’s Caixin Services PMI rose to 51.9 in March, sparking renewed GDP growth optimism and market focus on Beijing.
  • New business activity surged, fueled by stronger domestic demand and pro-growth policies from Chinese authorities.
  • Hang Seng Index bounced after the PMI release but fell on Trump’s tariff news, reflecting mixed market sentiment.
China Caixin Services PMI
In this article:

China’s Services Sector PMI Boosts GDP Growth Optimism

On Thursday, April 3, market attention turned to China’s economy following a stronger-than-expected Caixin Services PMI report and amid renewed concerns over US tariff measures announced by President Trump.

The Caixin Services PMI increased to a three-month high of 51.9 in March, up from 51.4 in February and higher than an expected 51.6. The March PMI survey revealed several key developments:

  • New business increased at the quickest pace in three months, supported by government policies, improved domestic demand, and effective marketing.
  • While domestic demand firmed, new export business remained flat.
  • Despite solid domestic demand, service providers cut jobs at the sharpest rate in nearly a year, citing cost concerns.
  • Input prices rose, with higher staffing expenses and supplier charges noted as key contributors.
  • Still, firms absorbed the cost increases and reduced service charges for a second consecutive month due to increased competition.
  • Service providers remained upbeat, bolstered by hopes of more policy support from Beijing and business initiatives. Nevertheless, firms were less optimistic than in February amid concerns about the global economy and geopolitical risks.

China Caixin Services PMI

China Caixin Services PMI
More information in our economic calendar

Expert Views on China’s Services Sector

Dr. Wang Zhe, Senior Economist at Caixin Insight Group, remarked:

“Market optimism was maintained. The indicator for expectations of future activity measured lower than February but remained in expansionary territory. Service providers were hopeful about future policy support at home. However, some expressed concerns over a potentially deteriorating global trade environment.”

The Market Reaction to the Caixin Services PMI

Financial markets responded swiftly to the PMI release, reflecting improving sentiment toward China’s economy.

Before the PMI data, the Hang Seng Index dropped to a low of 22,638. However, in response to the March PMI report, the Index briefly rose to a high of 22,962 before retreating to a post-report low of 22,826.

On Thursday, April 3, the Index was down 1.44% to 22,869 for the morning session. Concerns about President Trump’s tariffs overshadowed the upbeat PMI report.

Hang Seng Index under pressure after Trump's tariffs, muting services PMI influence.
Hang Seng Index – 5 Minute Chart – 030425

In the forex market, the AUD/USD reacted positively to the PMI data, rising from $0.62799 to a post-report high of $0.62871. However, the pair quickly reversed, falling to a post-report low of $0.62744. Trump’s tariffs weighed on Aussie dollar demand. On April 3, the AUD/USD was trading 0.33% lower at $0.62752.

The Australian dollar remains sensitive to developments in China’s economy and US trade policy.

Aussie dollar briefly reacts to upbeat PMI data.
AUDUSD – 5 Minute Chart – 030425

What’s Next? Tariffs in Focus

On Wednesday, April 2, President Trump announced sweeping tariffs affecting key economies, including China. Any rollback—particularly toward China—could lift risk sentiment, supporting the Aussie dollar and Asian equities. Conversely, retaliatory measures from China could fuel fears of a global trade war, impacting risk assets, including commodity currencies such as the Aussie dollar.

Discover strategies to navigate this week’s market trends here.

About the Author

Bob Masonauthor

With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.

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