(April 3): China’s service activity picked up in March, according to a private survey, a welcome sign before extra US tariffs pile pressure on the world’s second-largest economy.

The Caixin China services purchasing managers’ index rose to 51.9, versus 51.4 in February, according to a statement from Caixin and S&P Global on Thursday. The median forecast of economists surveyed by Bloomberg was 51.5. Any reading above 50 suggests expansion.

Beijing has shifted its economic focus to expanding domestic demand this year, making it a top priority after long relying on investment in manufacturing to drive growth. Behind the pivot is the urgency of containing the impact on overseas sales from President Donald Trump’s trade war to achieve this year’s ambitious growth target of around 5%.

On Thursday, the US hit China with the biggest-ever tariff hike on almost all its products.

In a special action plan published last month, policymakers promised a range of measures to revive consumption, including subsidising childcare costs and boosting incomes. Though a weak jobs market and China’s prolonged property crisis are still a drag on domestic demand, more buyers appear ready to loosen their purse strings.

A recent survey by Deutsche Bank AG showed consumer sentiment improved sharply from last year, an early sign that people are increasingly reaping the benefits of the government’s drive to boost household confidence.

The latest Caixin reading comes after last month’s pickup in the official non-manufacturing measure of activity in construction and services. After a two-month slowdown, the services PMI rose to 50.3 in March, as part of what the statistics bureau described as a recovery in the industry.

The private and official surveys cover different sample sizes, locations and business types, with the Caixin report focusing on small and medium-sized firms in the non-state sector.

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