The manufacturing activity in China climbed for the third consecutive month in December, however, the pace remained marginal, an official factory survey showed on Tuesday.
The National Bureau of Statistics purchasing managers’ index (PMI) eased to 50.1 in December, against 50.3 seen in November, reported Reuters. This data showed that the effects of the economic stimulus package could take more time to reflect in the economy as more risks remain about fresh trade.
The PMI estimate above the 50 mark indicates growth, while a figure under it reflects contraction. The Chinese economy worth $19 trillion has found it difficult to recover from the COVID-19 pandemic amidst weak consumption and investment. However, authorities remain optimistic that fiscal and monetary measures released later in the year would lead to a turnaround in the property market, which has weighed down the broader economy.
An improvement in domestic demand could help manufacturers amid a global economic slowdown, cutting down the impact of US President-elect Donald Trump’s proposed new tariffs on Chinese goods.
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The mixed industrial output and retail sales data for November released earlier in the month reflected how difficult it would be for China to clock a durable recovery in the economy going into 2025.
The non-manufacturing PMI climbed to 52.2 in the month, after it eased to 50 in November. Last week, the World Bank hiked its growth forecast for the Chinese economy for 2024 and 2025. However, the global body cautioned that muted household and business confidence would weigh down on the economy in the coming year. Further, headwinds in the property sector would also hinder the growth in the New Year.
Notably, it remains crucial for the Chinese authorities to stabilise the property sector which at its height in 2021 accounted for a quarter of the economy.
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