The main index fell for six months in mid-year, but returned to expansionary territory in October.China’s manufacturing activity expanded for the third straight month in December, official data showed on Tuesday, as world leaders struggled to reverse the world’s second-largest economic slowdown.
The country is struggling to emerge from a recession caused by a real estate crisis, weak consumption and soaring government debt.
According to the National Bureau of Statistics, China’s Purchasing Managers’ Index (PMI), a key indicator of industrial production, rose to 50.1 in December, marking the third consecutive month of expansion.
Tuesday’s figure was lower than the 50.2 expected by Bloomberg analysts, but still above 50, which indicates expansion in manufacturing activity.
The reading below shows shrinkage.
The main index fell for six months in mid-year, but returned to expansion territory in October.
In recent months, the Chinese government has announced a series of aggressive measures aimed at boosting growth, including lowering interest rates, lifting restrictions on home purchases and easing the debt burden on local governments.
But economists say more direct fiscal stimulus aimed at boosting domestic consumption is needed to fully restore China’s economy, which has struggled to fully recover since the coronavirus pandemic. It warns that.
The non-manufacturing PMI, which measures service sector activity, was 52.2 in December, up from 50.0 in November.
“Official PMIs suggest the economy gained momentum in December due to faster growth in the services and construction sectors,” Capital Economics’ Gabriel Ng said in a note to clients on Tuesday.
“The increase in policy support towards the end of the year clearly provided a short-term boost to growth,” Ng wrote.
Ng noted that export orders in particular rose to a four-month high in December, “probably helped by U.S. importers ramping up orders ahead of possible President Trump tariffs.” ” he pointed out.
The Chinese government is aiming for an official national growth target of around 5% this year, and while officials have expressed confidence they will reach the target, many economists think it will be achieved by a narrow margin.
The International Monetary Fund predicts that China’s economy will grow by 4.8% this year and 4.5% next year.
