Private Sector Indicator for Manufacturing Activity in China Rises Again

The private sector indicator for China's manufacturing sector showed that manufacturing continued to expand in December, but at a slower pace, and that recent stimulus efforts from Beijing helped stabilize the economy.

According to data released by Caixin Media Co. and S&P Global, the Caixin Manufacturing Purchasing Managers' Index declined to 50.5 in December from 51.5 in November. However, it remained above the 50-point mark.

Caixin noted that as the market improved in December, both supply and demand expanded. The production sub-index has been in the expansion zone for the 14th consecutive month, and total new orders increased for the third straight month in December, although both expanded at a slower rate due to a decline in production and sales of investment goods.

Wang Zhe, a senior economist at Caixin Insight Group, stated, “Exports have been pressured by increasing uncertainties arising from the overseas economic environment and global trade. The relevant indicator has entered the contraction zone for the fourth time in the past five months.”

Despite improving market conditions in recent months, employment continued to contract, with the employment sub-index shrinking for the fourth consecutive month in December.

According to Caixin, concerns about the outlook for economic recovery and the trade conflict with the United States have also weakened business optimism.

Wang from Caixin added, “The external environment is expected to be more complex this year, necessitating early policy preparation and immediate intervention. Additionally, future policy efforts should focus more on increasing household income and improving the livelihoods of people, particularly focusing on enhancing the spending ability and willingness of socially disadvantaged groups.”