(Yicai) April 9 -- Confidence in China’s economic outlook remained positive this month, despite easing down as a result of the US government ramping up “reciprocal tariffs” on Chinese goods, according to chief economists surveyed by Yicai.

The Yicai Chief Economists Confidence Index dipped to 50.33 this month from 50.65 last month, staying above the boom-bust line for the seventh consecutive month.

US President Donald Trump has raised tariffs on Chinese imports to an astonishing 104 percent after China matched his 34 percent border tax increase announced on April 2, which was levied on top of existing 20 percent duties on Chinese goods. That has effectively doubled the cost of Chinese-made products in America.

The new US tariffs have added significant uncertainty to global economic growth and increased downward pressure on China’s economy, said Li Wenlong, chief economist at the Pan-Asia Research Institute of Digital Economy. He added that China’s foreign trade is facing increasingly severe challenges, which could affect overall economic growth.

Against this background, China should increase fiscal support, including more bond issuance and tax cuts, to maintain government spending, lighten the burden on companies, and stimulate consumer spending, Li said. Monetary policy should also be more accommodative to address the liquidity issues faced by small and medium-sized enterprises.

Among the chief economists surveyed, the average forecast for China’s first-quarter economic growth was 5.13 percent, higher than the fourth-quarter’s 5 percent clip. They predict 4.83 percent growth for the full year, a little under last year’s expansion of 5 percent.

China’s economic expansion continued to gain momentum in the first three months of this year. The official manufacturing purchasing managers' index rose by 0.3 point month-on-month to a one-year high of 50.5 in March. Cheng Shi, chief economist at ICBC International, said the increase indicates continued recovery in the manufacturing sector.

Amid growing external uncertainty this quarter, policymakers are expected to introduce more targeted and forward-looking measures to provide sustained support for the real economy and help maintain economic stability, Cheng added.

Consumer, Producer Prices

The chief economists expect the consumer price index to have inched 0.09 point lower last month from a year earlier, compared with a 0.7 point drop in February, when consumer prices fell for the first time in 13 months due to softened demand following the Chinese New Year holiday. 

However, factory gate prices are expected to remain weak. After falling for the 29th consecutive month in February, the producer price index is expected to have declined by 2.21 points in March from a year ago, slightly steeper than the previous month.

Total retail sales of consumer goods are seen as having grown by almost 4.2 percent in March versus a year earlier, up from the 4 percent increase in the first two months of this year.

Respondents to the survey indicated that industrial value-added output may have jumped by around 5.8 percent in March, slightly below the 5.9 percent growth observed in the first two months, which are often influenced by the Chinese New Year holiday.

From January to March, fixed-asset investment is expected to have grown by 4.07 percent, down from the 4.1 percent clip logged in the first two months.

The chief economists forecast exports to have risen by 4.03 percent in March, up from 2.3 percent growth in the first two months. The decline in imports is thought to have been 2.35 percent, an improvement on the earlier 8.4 percent drop. The average forecast for March’s trade surplus was USD78.6 billion, compared with USD170.5 billion in the previous two months.

Editors: Dou Shicong, Emmi Laine