HONG KONG — According to recent official data, China’s manufacturing sector experienced a slower rate of growth in December, despite the government’s attempts to stimulate the economy and the rising threats to trade conditions.
The Purchasing Managers’ Index (PMI), which reflects the sentiments of factory managers, decreased to 50.1 in December from 50.3 in the preceding month, as reported by the National Bureau of Statistics.
This figure indicates that despite the drop, it marks the third consecutive month that the index has remained above the crucial 50 threshold, signifying an expansion in manufacturing activity.
The observed deceleration in factory output has been attributed to a reduction in the output component of the index, as noted by Gabriel Ng from Capital Economics. He pointed out that the decline in the output price component also indicates persistent pressure on prices.
On a positive note, new orders surged to reach an eight-month high, while the export order index climbed to its highest level in four months. This increase is likely due to U.S. importers accelerating purchases to avoid potential tariff hikes that could be introduced by incoming President Donald Trump on Chinese imports, Ng explained.
Trump has indicated plans for a 10% tariff on goods from China, which poses a significant risk to the trade landscape for the largest goods exporter globally.
China is already facing challenges from a slowing economy, characterized by decreased consumer spending and ongoing issues within the real estate market.
Additionally, a separate PMI that tracks the non-manufacturing sector, which includes both construction and services, showed improvement, rising to 52.2 points, compared to 50 points in November.
Last week, the World Bank adjusted its growth projections for the Chinese economy, raising it to 4.9%. However, it also cautioned that several factors, such as dwindling confidence among both businesses and households, an aging population, as well as concerns over low consumption and high levels of debt, will continue to exert pressure on China’s economic prospects moving forward.
