BANGKOK – In a positive turn for the Chinese economy, factory activity grew for the first time in eight months this December, fueled by an uptick in orders as holidays approached and construction projects neared completion, as per reports released on Wednesday.
The National Bureau of Statistics revealed that the official purchasing managers index (PMI) for manufacturing, a key monthly business survey, climbed to 50.1 this month. This figure, which surpasses the 50-point threshold that distinguishes expansion from contraction, indicates slight growth. A separate private sector survey also recorded the PMI at 50.1 for December.
The unexpectedly favorable results can be attributed in part to a prolonged easing of trade tensions with the United States. Additionally, it appears that manufacturers accelerated production in anticipation of the upcoming New Year holidays, a period during which many businesses temporarily shut down. The Lunar New Year in China is set to occur in mid-February this year.
The global economic powerhouse is projected to grow at a rate slightly below its official target of about 5% for the year, buoyed by robust performance in high-tech sectors and exports. Notably, the official PMI for high-tech manufacturing rose to 52.5 in December, marking a 2.4 percentage point increase from the previous month.
According to the report, the PMIs for both equipment and consumer goods manufacturing reached 50.4.
A separate analysis by RatingDog, a credit research firm based in Shenzhen, indicated that while there was a rise in overall orders, new export sales experienced a slight decline and there was a reduction in hiring.
“Overall, the manufacturing sector regained growth at the end of 2025,” RatingDog’s founder Yao Yu said in a statement. “However, the improvement was marginal, with the impact of promotions and new products appearing impulse-driven and their sustainability requiring observation.”
The National Statistic Bureau said the PMI measures for food, textiles, clothing and electronics were above a relatively strong 53.
However, while large manufacturers increased their output, factory activity for the small and mid-sized enterprises that account for the lion’s share of employment in China remained in contractionary territory. As consumers cut back on spending, conditions for retailers and restaurants also deteriorated, the report said.
Some economists believe China’s economy is growing more slowly than official figures suggest. Its leaders are grappling with long-term challenges including a yearslong slump in the country’s property sector and excess capacity in many industries, including automaking, that has led to damaging price wars.
Higher costs for raw materials, especially for metals, has put pressure on company profit margins, the RatingDog report said. It noted that exporters had raised prices for the first time in three months to help offset those higher costs.
The upturn in activity may be short-lived as it appears to be helped by a slight increase in government spending, Julian Evans-Pritchard of Capital Economics said in a report.
“The big picture is that the structural headwinds from the property downturn and industrial overcapacity are set to persist in 2026 and there appears to be limited appetite among policymakers for a big increase in demand-side stimulus,” he said.
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