Manufacturing activity in China fell further in December, official data showed on Sunday. This marked the end of a year in which China's economy struggled to fully recover from the pandemic.
The Purchasing Managers' Index (PMI), which reflects the health of the industrial sector, was at 49.0 points, compared to 49.4 points in November, according to the National Bureau of Statistics (NBS). This is the third month in a row that this index recorded a decline. A number above 50 indicates an expansion in manufacturing activity, while a lower number indicates a decline. The PMI briefly crossed the 50 mark into positive territory in September, a first time since March 2023.
“In December […]“The vitality of the manufacturing sector has declined somewhat,” said a BNS press release. Although China began easing its strict Covid restrictions in December 2022, its economic recovery after nearly three years has been hampered by a lack of consumer and business confidence, an ongoing housing crisis and record unemployment among young people. In addition, a global economic slowdown has negatively impacted demand for Chinese products.
Beijing has taken several targeted measures in recent months, including a large issuance of government bonds, to boost infrastructure spending and boost economic activity. However, the results of these measures have been mixed so far, with the PMI entering positive territory only once in the last nine months.
Despite some encouraging signs, such as China's third-quarter GDP growth of 4.9%, which beat forecasts, Beijing is expected to struggle to meet its annual growth target of about 5%, the most modest in years.