China's manufacturing sector continued its growth streak in December, fueled by government stimulus measures. While economists urge for more direct action to boost consumption, the services sector also showed strong performance.
China's manufacturing activity expanded in December for the third month in a row, according to official data released on Tuesday, as leaders strive to reverse a slowdown in the world's No. 2 economy. The country has faced challenges in recovering from a slump driven by a property market crisis, weak consumption, and mounting government debt. China's purchasing managers' index ( PMI ) — a key indicator of industrial output — stood at 50.
1 in December, marking a third consecutive month of expansion. This figure, while lower than Bloomberg analysts' prediction of 50.2, remained above 50, signaling an increase in manufacturing activity. A reading below 50 indicates contraction. The key indicator had declined for six months in the middle of the year before returning to expansion territory in October. Beijing has implemented a series of aggressive measures in recent months to stimulate growth, including interest rate cuts, relaxation of homebuying restrictions, and easing the debt burden on local governments. However, economists have cautioned that more direct fiscal stimulus targeted at bolstering domestic consumption is necessary to fully restore the health of China's economy, which has struggled to regain its pre-Covid-19 pandemic strength. The nonmanufacturing PMI, which gauges activity in the service sector, reached 52.2 in December, up from 50.0 in November. 'The official PMIs suggest that the economy gained momentum in December, driven by faster growth in the services and construction sectors,' Gabriel Ng of Capital Economics wrote in a note to clients Tuesday. 'Increased policy support toward the end of the year has clearly provided a near-term boost to growth,' Ng added. Ng pointed out that export orders, particularly, rose to a four-month high in December, 'probably aided by US importers increasing orders in anticipation of potential Trump tariffs'.
MANUFACTURING CHINA ECONOMY GROWTH PMI
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