China factory activity grows, ending longest slump on record

China Factory Activity Grows, Ending Longest Slump on Record

China’s factory activity staged a surprise recovery in December, snapping an eight-month contraction streak that was the longest slump on record.

The official manufacturing purchasing managers’ index rose to 50.1 from 49.2 last month, according to data released by the National Bureau of Statistics on Wednesday. That defied economists’ forecast for continued weakness and exceeded the 50-mark separating expansion and contraction.

While factory activity returned to expansion, the broader data point to a fragile economic backdrop as the year draws to a close. Investment lost further ground in November, consumer spending growth slowed sharply, industrial output undershot expectations and the property sector deteriorated, reflecting persistent weakness in domestic demand.

Even so, there has been little sign of fresh policy support. With China’s 2025 growth target likely within reach, policymakers appear in no rush to roll out additional stimulus and any new push may be deferred until early next year.

President Xi Jinping has signaled a tolerance for slower growth in some regions and even said recently that China should crack down on “reckless” projects, highlighting his focus on the quality, rather than pace, of economic growth.

The official non-manufacturing index tracking construction and services rose more than forecast to 50.2 in December from 49.5 a month earlier, the statistics office said.

Separately, a private survey also showed factory activity unexpectedly climbed to 50.1 from 49.9 in November, matching the official gauge. The two surveys cover different sample sizes, locations and business types, with the private poll focusing on smaller, export-oriented firms.