China factory activity decline deepens in December

The official manufacturing purchasing managers’ index (PMI) — a key measure of factory output — stood at 49.0 in December, below the 50-point mark separating expansion from contraction, according to the National Bureau of Statistics (NBS).

The reading signaled a further slump from November’s figure of 49.4 and represented the third straight month of contraction.

“In December… the level of vitality in the manufacturing sector somewhat declined,” the NBS said in an official readout.

China began dismantling its tight Covid restrictions in December 2022 after almost three years, allowing the economy to rebound.

But the recovery has stumbled amid weak consumer and business confidence, an entrenched housing crisis and record youth unemployment, while a global slowdown has weighed on demand for Chinese goods.

In recent months, Beijing has announced a slew of targeted measures as well as a sizable issuance of sovereign bonds to boost infrastructure spending and rev up economic activity.

But the results so far have been mixed, with the PMI only edging into positive territory once in the past nine months.

There have been some signs of life, with the world’s second-largest economy growing at a better-than-expected 4.9% in the third quarter.

But Beijing still faces a tough task to achieve its stated annual growth target of around five percent, itself the lowest such aim in years.