BANGKOK (AP) — Factory activity in China expanded in December for the first time in eight months as orders increased ahead of the holidays and builders scrambled to complete projects, a survey showed Wednesday.
The official manufacturing purchasing managers’ index, a monthly survey of businesses, rose to 50.1 this month, the National Bureau of Statistics reported. This is slightly above 50, the dividing line between expansion and contraction within 100. Another private sector survey also showed a reading of 50.1 in December.
The better-than-expected data partly reflected easing pressure from an extended truce in trade tensions with the United States. They also showed that manufacturers ramped up production ahead of the New Year holiday, when many companies were closed for several days. Mid-February this year is the Chinese Lunar New Year.
The world’s second-largest economy is expected to grow slightly below the official target of about 5% this year, supported by strong activity in high-tech industries and exports. The official high-tech manufacturing PMI in December was 52.5, an increase of 2.4 percentage points from the previous month.
The report said that the PMI of the equipment manufacturing industry and consumer goods industry both reached 50.4.
A separate report from RatingDog, a Chinese credit research and analysis firm based in the southern city of Shenzhen, said that while overall orders increased, new export sales fell slightly and hiring also weakened.
“Overall, the manufacturing industry will resume growth at the end of 2025,” RatingDog founder Yao Yu said in a statement. “However, this improvement is minimal and the impact of promotions and new products appears to be impulse driven and its sustainability needs to be seen.”
The National Bureau of Statistics said that PMI indicators for food, textiles, clothing and electronic products were all above the relatively strong 53.
However, even as large manufacturers increase output, factory activity at small and medium-sized enterprises, which account for the majority of employment in China, remains in contraction. The report said conditions for retailers and restaurants also worsened as consumers cut back on spending.
Some economists believe China’s economy is growing more slowly than official data suggests. China’s leaders are grappling with long-term challenges, including a years-long slump in the country’s real estate sector and overcapacity in many industries, including automaking, that has led to damaging price wars.
RatingDog reports that rising raw material costs, especially metal costs, have put pressure on the company’s profit margins. It noted that exporters raised prices for the first time in three months to help offset higher costs.
