China's Manufacturing PMI at 50.1 in December... Expansion Phase Continues for 3 Consecutive Months

China's manufacturing Purchasing Managers' Index (PMI), which indicates economic trends, continued its expansion phase for the third consecutive month. The non-manufacturing PMI rose 2.2 points from the previous month to 52.5, marking the largest increase in nine months.

China's National Bureau of Statistics announced on the 31st that the manufacturing PMI for December was recorded at 50.1, down 0.2 points from the previous month.

A factory located in Deqing County, Zhejiang Province, China. Photo by Xinhua News Agency

The PMI statistics, based on surveys of corporate purchasing managers, serve as an indicator of economic trends. A reading above the baseline of 50 indicates economic expansion, while below 50 indicates contraction.

The December manufacturing PMI slightly missed market expectations compiled by Reuters and Bloomberg News, which were 50.3 and 50.2 respectively.

The manufacturing PMI had remained in contraction territory for five consecutive months since May but returned to expansion territory at 50.1 in October and rose to 50.3 in November.

By company size, the large enterprise PMI in December was 50.5, indicating expansion but down 0.4 points from the previous month. The medium-sized enterprise PMI rose 0.7 points to 50.7. The small enterprise PMI was 48.5, down 0.6 points from the previous month, remaining in contraction territory.

Among the five sub-indices that make up the manufacturing PMI, the production index was 52.1, down 0.3 points from the previous month but still in expansion territory. The new orders index rose 0.2 points to 51.0, and the supplier delivery time index also increased by 0.7 points to 50.9.

The raw materials inventory index (48.3) and employment index (48.1) remained below the baseline.

The non-manufacturing PMI rose 2.2 points from the previous month to 52.5, reflecting the effects of economic stimulus measures.

The construction activity index increased 3.5 points from the previous month to 53.2.

The services activity index rose 1.9 points from the previous month to 52, marking the highest level since April. Bloomberg News reported that with China's manufacturing activity expanding for three consecutive months, expectations have risen that the annual economic growth target can be achieved.

The Chinese government set an economic growth target of around 5% for this year, but analyses suggest a red light for achieving the goal due to domestic demand stagnation and continued deterioration in the real estate market. In response, various economic stimulus measures, including interest rate cuts, have been introduced.

Raymond Yeung, Chief Economist at Australia & New Zealand Banking Group, stated, "The growth support measures promised over the past few months seem to be yielding results."

However, Bloomberg pointed out that since the Chinese economy relies heavily on exports as a key growth driver, and with the inauguration of U.S. President-elect Donald Trump in January who has pledged to impose high tariffs, boosting domestic demand remains a major challenge.

This content was produced with the assistance of AI translation services.