1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In March, the manufacturing PMI exceeded seasonal expectations and returned above the boom - bust line, with the production index seasonally rebounding, both domestic and external demand improving, and enterprises actively replenishing inventories. The service industry PMI returned to the expansion range, while the construction industry was still in the contraction range, and cost - rising pressure emerged. The subsequent focus should be on international situation changes and promoting various economic - stabilizing policies [1][10]. - The improvement in the manufacturing PMI in March led to some adjustments in the bond market. The current core driving factors of the market are the Middle East situation, inflation expectations, and the increasing allocation power in the bond market. Ultra - long - term interest rates have entered a stage of restorative decline, and the bond market is expected to be volatile and bullish. Future attention should be paid to the persistence of the decline in risk appetite, the situation of fundamental recovery, and the special treasury bond issuance plan in Q2 [4][36]. 3. Summary by Relevant Catalogs 3.1 3 - month PMI Data Review - Manufacturing: In March, the manufacturing PMI was 50.4%, a 1.4 - percentage - point increase from the previous month, returning above the boom - bust line after two months. The production index seasonally recovered, both domestic and external demand improved, the price index rebounded significantly, enterprises actively replenished inventories, and procurement volume returned to the expansion range [10]. - Non - manufacturing: The service industry PMI returned to the expansion range, and the construction industry's contraction slowed down. In March, the service industry business activity index rose 0.5 percentage points to 50.2%, and the construction industry business activity index rose 1.1 percentage points to 49.3%. However, the month - on - month performance of both was weaker than the non - epidemic Spring Festival seasonality [12][15]. 3.2 Manufacturing: Simultaneous Improvement in Production and Demand, and a Significant Rebound in the Price Index - Production: The manufacturing PMI production index in March was 51.4%, a 1.8 - percentage - point increase from the previous month, returning to the expansion range. This was due to the return of employees after the Spring Festival, the recovery of market demand, and the further manifestation of policy effects [16]. - Demand: Both domestic and external demand improved. The proportion of manufacturing enterprises reporting insufficient market demand dropped to below 50% for the first time since July 2022. The new order and new export order indexes increased by 3.0 and 4.1 percentage points respectively. SMEs stabilized, and three key industries expanded rapidly [18][20]. - Price: Affected by rising commodity prices and accelerated corporate procurement, the main raw material purchase price index and ex - factory price index rose by 9.1 and 4.8 percentage points respectively. The ex - factory price index reached a new high since April 2022, indicating that the year - on - year growth rate of PPI in March is expected to turn positive [22]. - Inventory: Enterprises actively replenished inventories, and procurement volume returned to the expansion range. The raw material inventory and finished - product inventory indexes increased by 0.2 and 0.9 percentage points respectively, and the procurement volume index rose to 50.9% [23]. 3.3 Non - manufacturing: Service Industry PMI Returns to Expansion, Construction Industry's Contraction Slows Down - Service Industry: In March, the service industry's prosperity increased slightly by 0.5 percentage points, returning above the boom - bust line. Industries such as railway transportation, telecommunications, and finance were in a high - prosperity range, while consumer - related industries declined due to the high base of Spring Festival consumption [29]. - Construction Industry: In March, the construction industry business activity index rose 1.1 percentage points to 49.3%. The civil engineering construction industry showed a significant increase, while the housing construction industry was still below 50%. The overall recovery was slower than in previous post - holiday periods [32]. 3.4 Impact on the Bond Market - In March, the manufacturing PMI exceeded seasonal expectations, the service industry PMI returned to expansion, but the construction industry was still in contraction, and cost - rising pressure emerged. The bond market adjusted due to the improvement in the manufacturing PMI. The current core driving factors are the Middle East situation, inflation expectations, and the increasing allocation power in the bond market. The bond market is expected to be volatile and bullish, and future attention should focus on risk appetite, fundamental recovery, and the special treasury bond issuance plan in Q2 [36].

Core Viewpoint - The significant rebound in the March PMI is attributed to the fading effects of the Spring Festival and accelerated demand recovery [3][9]. Manufacturing PMI - The manufacturing PMI rose to 50.4% in March, up 1.4 percentage points from the previous month, reflecting a recovery post-Spring Festival [2][3]. - The new orders index increased by 3 percentage points to 51.6%, indicating stronger demand recovery compared to previous years [3][16]. - The production orders index only rose by 1.8 percentage points to 51.4%, suggesting slower recovery in production due to delayed resumption of work [3][16]. Industry Analysis - The consumer goods sector saw a larger PMI increase of 2 percentage points to 50.8%, indicating a faster demand recovery compared to other sectors [4][20]. - The equipment manufacturing and high-tech manufacturing PMIs increased by 1.7 and 0.6 percentage points to 51.5% and 52.1%, respectively, but showed weaker production performance [4][21]. Non-Manufacturing PMI - The non-manufacturing PMI rose to 50.1%, with the construction sector's PMI increasing by 1.1 percentage points to 49.3%, which is lower than the previous year's recovery rate [4][24]. - The construction project resumption rate was 62%, down 2.6 percentage points from the same period in 2025, indicating slower recovery in the sector [4][24]. Future Outlook - The focus on expanding domestic demand and promoting consumption is expected to enhance the recovery of domestic demand, which may outpace external demand [5][34]. - However, rising oil prices due to geopolitical risks could negatively impact manufacturing profitability, with a transmission lag of about 3-4 months [5][34]. Regular Tracking - The manufacturing PMI showed a recovery, with the new orders index rising significantly [6][43]. - The service sector PMI increased slightly to 50.2%, but the new orders index fell by 0.4 percentage points to 45.3% [6][52]. - The construction sector's new orders index improved marginally by 1.3 percentage points to 43.5% [6][54].

Core Viewpoint - The article highlights the recovery signals in the Chinese economy post-Spring Festival, with key indicators such as the manufacturing PMI and non-manufacturing business activity index returning to expansion territory, indicating improved economic confidence and activity levels [3][5]. Manufacturing Sector Recovery - In March, the manufacturing new orders index rose to 51.6%, up 3 percentage points from the previous month, indicating a return to expansion after two months below 50% [5]. - The new export orders index improved significantly to 49.1%, an increase of 4.1 percentage points, reflecting better external demand [5]. - The production index for manufacturing rose to 51.4%, up 1.8 percentage points, signaling a steady recovery in production as companies resumed operations post-holiday [5]. - Employment in the equipment manufacturing and high-tech sectors showed improvement, with indices rising to near 50%, indicating stabilization in new growth sectors [6]. - The production expectations index for March was 53.4%, suggesting increased confidence among manufacturing firms regarding market developments [6]. Price Dynamics and Material Costs - The purchasing volume index rose to 50.9%, indicating expansion in raw material procurement activities, while the purchasing price index surged to 63.9%, reflecting a significant increase in raw material prices [7]. - The ex-factory price index reached 55.4%, marking a new high since April 2022, driven by rising demand and material costs [7]. - The rapid increase in basic raw material prices, with the purchasing price index exceeding 70%, has led to higher costs for downstream manufacturing sectors [8]. - The geopolitical situation in the Middle East has contributed to rising costs in oil and chemical sectors, impacting overall manufacturing costs and potentially affecting production rhythms [9]. Non-Manufacturing Sector Insights - The non-manufacturing business activity index for March was 50.1%, reflecting a slight increase, with construction and service sectors showing varied performance [11]. - The construction activity index rose to 49.3%, indicating a slight recovery post-Spring Festival, while service-related sectors faced challenges due to rising costs from geopolitical tensions [12]. - The retail, accommodation, and catering sectors experienced a decline in activity levels, suggesting a need for further monitoring of consumer demand recovery [13].

Group 1: PMI Overview - The manufacturing PMI for March is 50.4%, an increase of 1.4 percentage points from the previous month, indicating a return to the expansion zone[1] - The production index for manufacturing rose to 51.4%, up 1.8 percentage points, reflecting accelerated manufacturing activity[3] - The new orders index for manufacturing increased to 51.6%, a rise of 3 percentage points, marking a return to the expansion zone after two months below 50%[3] Group 2: Economic Conditions - The composite PMI output index is 50.5%, up 1.0 percentage points from last month, indicating overall improvement in business activities[8] - The non-manufacturing business activity index is at 50.1%, an increase of 0.6 percentage points, ending two consecutive months below 50%[7] - The equipment manufacturing new orders index rose over 3 percentage points to above 53%[1] Group 3: Price Trends and Cost Pressures - The raw material purchase price index surged to 63.9%, a significant increase of 9.1 percentage points, indicating rising costs in manufacturing[5] - The ex-factory price index rose to 55.4%, up 4.8 percentage points, remaining in the expansion zone for three consecutive months[6] - The geopolitical situation in the Middle East has contributed to rising costs, particularly in the petrochemical sector, affecting the supply chain[6] Group 4: Employment and Business Sentiment - The employment index remains low at 48.6%, indicating ongoing employment pressures and insufficient hiring willingness[21] - The business expectations index for manufacturing rose to 53.4%, up 0.2 percentage points, reflecting optimism among manufacturers[2] - Large enterprises have a PMI of 51.6%, while small and medium enterprises have PMIs of 49% and 49.3%, respectively, showing marginal improvement in smaller firms[4]

Manufacturing Sector - The manufacturing PMI for March 2026 is reported at 50.4%, an increase of 1.4 percentage points from the previous month, indicating a return to the expansion zone[2][4] - The production index rose by 1.8 percentage points, while the new orders index increased by 3.0 percentage points, reflecting a positive trend in manufacturing activities[4][12] - The proportion of companies reporting insufficient demand decreased to 48.5%, down 6.6 percentage points from the previous month, marking the first drop below 50% since July 2022[12] External Demand and Trade - The new export orders index surged to 49.1%, up 4.1 percentage points from the previous month, indicating a significant improvement in external demand[18] - The import orders index also rose to 49.8%, reflecting a synchronized recovery in trade activities[18] Price Trends - The raw material purchase price index increased by 9.1 percentage points to 63.9%, outpacing the factory price index, which rose by 4.8 percentage points to 55.4%, indicating rising cost pressures for businesses[21] - Both raw material and finished goods inventory indices saw a slight increase, with raw material inventory rising to 47.7% and finished goods inventory to 46.7%[22] Service Sector - The service sector PMI improved to 50.2%, a 0.5 percentage point increase from the previous month, driven by post-holiday resumption of work[24] - Key sectors such as transportation and financial services showed strong business activity indices above 55.0%, while retail and hospitality sectors experienced a decline[24]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - In March 2026, the manufacturing PMI rebounded beyond expectations, indicating an economic recovery, but the recovery strength is average and the expectations are cautious. Without considering external uncertainties, the prices of domestically - priced commodities are expected to rise. The manufacturing PMI in April 2026 is likely to decline, which is a crucial observation window [4][5][6]. - In March 2026, the non - manufacturing PMI rose, but multiple sub - items are at historically low levels, and the non - manufacturing industry is still in the bottom - building process. The construction industry is still in a downward trend, but the sales price sub - item has bottomed out [29][32]. 3. Summary by Relevant Catalogs Part 1: Review of China's Manufacturing and Non - manufacturing PMI Data Tables - Manufacturing PMI: In March 2026, all sub - items of the manufacturing PMI increased compared to February. The significant increases include the purchase price of main raw materials (up 9 to 63.9), ex - factory price (up 4.8 to 55.4), import (up 4.2 to 49.8), new export orders (up 4.1 to 49.1), and new orders (up 3 to 51.6) [3][4]. - Non - manufacturing PMI: In March 2026, the business activity of non - manufacturing PMI was 50.1, up 0.6 from the previous month. The sub - items with relatively large increases were new export orders, input prices, sales prices, and delivery time. The sub - items with relatively large decreases were domestic demand, inventory, business activity expectations, and employees [3][29]. Part 2: March Manufacturing PMI Reflects Economic Service Beyond Expectations - Manufacturing PMI reached 50.4 in March 2026, up 1.4 from the previous month, higher than the market expectation of 50.1, and above the 50 boom - bust line again after two months. All sub - items increased, indicating an economic recovery. However, some key sub - items are still below 50, and some sub - items are at the second - lowest or lowest levels in the same period since 2018. The economic recovery is influenced by factors such as the arrival of the demand peak season, economic improvement, and price increases due to the Middle East conflict. The recovery strength is average, and expectations are cautious. The prices of domestically - priced commodities are expected to rise. In April 2026, the manufacturing PMI is likely to decline, which is a crucial observation window [4][5][6]. Part 3: Multiple Sub - items of March Non - manufacturing PMI are at Historically Low Levels - In March 2026, the non - manufacturing PMI business activity was 50.1, up 0.6 from the previous month and higher than the expected 49.9, returning above 50 again after two months. The sub - items of non - manufacturing PMI showed mixed trends. The new orders and domestic demand sub - items decreased against the season, indicating that the non - manufacturing industry is still in the bottom - building process. Some sub - items are at the lowest or second - lowest levels in the same period over the years. The construction industry PMI shows a downward trend, but the sales price sub - item has bottomed out, suggesting that the housing price may be stabilizing, but the sustainability needs to be observed [29][32].

Core Viewpoint - In March 2026, China's Purchasing Managers' Index (PMI) returned to the expansion zone, indicating a recovery in economic sentiment with manufacturing PMI at 50.4%, non-manufacturing business activity index at 50.1%, and composite PMI output index at 50.5% [1]. Group 1: Manufacturing PMI - The manufacturing PMI rose to 50.4% in March, reflecting increased market activity as companies resumed operations post-Spring Festival [2]. - Both production index and new orders index improved, reaching 51.4% and 51.6% respectively, indicating accelerated production activities and improved market demand [2]. - Large, medium, and small enterprises all saw a rise in PMI, with large enterprises at 51.6%, medium at 49.0%, and small at 49.3%, showing significant improvement in sentiment for smaller firms [2]. Group 2: Key Industries - High-tech manufacturing PMI stood at 52.1%, marking 14 consecutive months above the critical point, indicating a positive development trend [3]. - Equipment manufacturing and consumer goods industries also showed expansion with PMIs of 51.5% and 50.8% respectively [3]. - The price index for major raw materials surged, with purchasing price index at 63.9% and factory price index at 55.4%, reflecting a significant increase in market prices [3]. Group 3: Non-Manufacturing PMI - The non-manufacturing business activity index rose to 50.1%, indicating an improvement in the non-manufacturing sector [5]. - The service sector's business activity index reached 50.2%, with certain industries like telecommunications and financial services showing strong growth [5]. - The construction industry also saw an improvement, with a business activity index of 49.3%, reflecting a recovery in construction projects post-holiday [5]. Group 4: Composite PMI - The composite PMI output index increased to 50.5%, indicating an overall positive trend in production and business activities across sectors [6]. - The manufacturing production index and non-manufacturing business activity index contributed to this increase, standing at 51.4% and 50.1% respectively [6].

Group 1: PMI Overview - In March, the manufacturing PMI recorded 50.4%, up 1.25 percentage points from the average of January-February[2] - The services PMI reached 50.2%, increasing by 0.6 percentage points compared to the January-February average[2] - The construction PMI rose to 49.3%, up 0.8 percentage points from the January-February average[2] Group 2: Demand and Supply Dynamics - Manufacturing PMI returned above the threshold, indicating improved supply and demand post-Spring Festival[5] - New orders and new export orders indices increased to 51.6% and 49.1%, respectively, both up by 2.7 percentage points from January-February[5] - Manufacturing production index rose to 51.4%, up 1.3 percentage points from January-February[5] Group 3: Price Trends - Raw material purchase prices index and factory prices index reached 63.9% and 55.4%, respectively, both hitting new highs for 2023[5] - Raw material prices saw a significant increase, with the monthly rise being the second highest since 2005[5] Group 4: Sector-Specific Insights - The construction sector showed signs of recovery, with the business activity index for March at 49.3%, indicating a rise in infrastructure investment activities[5] - The services sector's business activity index was 50.2%, with certain industries like telecommunications and finance showing strong growth, while retail and hospitality lagged[5] Group 5: Risks and Outlook - Risks include slower-than-expected domestic demand recovery, changes in domestic policies, and fluctuations in the international trade environment[3]

Group 1: PMI Overview - The manufacturing PMI for March is reported at 50.4%, up from 49% in February, indicating a significant rebound[1][7] - The non-manufacturing PMI stands at 50.1%, an increase from 49.5% in the previous month[1][7] Group 2: Factors Influencing PMI - The rebound in March PMI is attributed to the end of the Spring Festival disruptions and accelerated demand recovery[2][8] - The manufacturing PMI increased by 1.4 percentage points month-on-month, while the actual PMI, excluding weather-related supplier delivery impacts, rose by 1.5 percentage points to 50.3%[2][8] Group 3: New Orders and Production - The new orders index rose by 3 percentage points to 51.6%, surpassing the typical recovery seen in previous years after the Spring Festival[2][9] - The production orders index increased by only 1.8 percentage points to 51.4%, indicating slower recovery in production compared to new orders[2][9] Group 4: Sector Performance - The consumer goods sector's PMI increased by 2 percentage points to 50.8%, reflecting a faster recovery in demand compared to other sectors[3][15] - The equipment manufacturing and high-tech manufacturing PMIs rose by 1.7 and 0.6 percentage points, respectively, indicating weaker production performance despite new orders increasing by over 2 percentage points[3][15] Group 5: Non-Manufacturing Sector Insights - The construction PMI rose by 1.1 percentage points to 49.3%, but this is lower than the typical recovery seen in previous years, reflecting slow post-holiday resumption of work[3][18] - The service sector PMI saw a slight increase of 0.5 percentage points to 50.2%, with the new orders index declining by 0.4 percentage points to 45.3%[3][39]

Group 1: Manufacturing PMI Insights - In March, the Manufacturing Purchasing Managers' Index (PMI) rose to 50.4%, indicating a return to the expansion zone, driven by increased market activity post-Spring Festival [4] - Both production index and new orders index improved, reaching 51.4% and 51.6% respectively, reflecting accelerated production activities and improved market demand [4] - Large, medium, and small enterprises all showed PMI increases, with large enterprises at 51.6%, medium at 49.0%, and small at 49.3%, indicating a general improvement in economic conditions [4][5] Group 2: Sector-Specific Performance - High-tech manufacturing PMI reached 52.1%, marking 14 consecutive months above the critical point, indicating a positive development trend [5] - The equipment manufacturing and consumer goods sectors also saw PMIs of 51.5% and 50.8%, respectively, both entering the expansion zone [5] - The price indices for major raw materials and factory prices significantly increased to 63.9% and 55.4%, respectively, due to rising commodity prices and increased procurement activities [5] Group 3: Non-Manufacturing PMI Insights - The Non-Manufacturing Business Activity Index rose to 50.1%, showing an improvement in the non-manufacturing sector's economic conditions [7] - The service sector's business activity index reached 50.2%, with significant growth in sectors like rail transport and financial services, while retail and hospitality lagged behind [7] - The construction sector's business activity index improved to 49.3%, with a positive outlook for future activities as indicated by a business activity expectation index of 50.5% [7] Group 4: Comprehensive PMI Overview - The Comprehensive PMI Output Index increased to 50.5%, indicating an overall improvement in production and business activities across sectors [8] - The manufacturing production index and non-manufacturing business activity index contributed to this increase, standing at 51.4% and 50.1% respectively [8]