China's services sector in March saw a notable increase, reaching a three-month high as reported in a private survey. Both business activity and new orders showed improvement compared to February. The Caixin/S&P Global services purchasing managers' index (PMI) rose from 51.4 in February to 51.9 in March, marking the highest level since December. This increase aligns closely with the official survey, which indicated a rise in services PMI from 50.0 to 50.3.

These survey results are positive indicators for China's economic growth in March. Standard Chartered revised its GDP growth forecast for China in the first quarter from 4.8% to 5.2%, citing stronger-than-expected activity in January-February as a contributing factor. However, the announcement of U.S. President Donald Trump imposing tariffs on imports, particularly targeting Chinese imports with a 34% tariff, may pose challenges to China's growth momentum and robust export performance.

The services industry in China employed 48% of workers by 2023 and contributed 56.7% to the total GDP in the previous year. Trump's trade policies could negatively impact the manufacturing sector, affecting employment plans and consumer confidence amid economic uncertainties.

Looking ahead, economists like Wang Zhe from Caixin Insight Group suggest that China needs proactive macroeconomic policies by 2025 to navigate the increasingly complex external environment. The Caixin services survey highlighted that new business growth improved significantly due to domestic demand, while new export business remained stable in March. Respondents attributed the rise in new orders to supportive policies, marketing initiatives, and overall improvement in demand conditions.