China factory activity picks up as orders rebound
Factory activity in China expanded for the first time in eight months in December as orders piled up ahead of the holidays and builders rushed to finish projects.
The official purchasing managers’ index for the manufacturing sector, a monthly survey of companies, rose to 50.1 in December, the Office for National Statistics reported on Wednesday.
This was just above the 50 mark for expansion versus contraction on a scale of up to 100.
Another private sector survey was at 50.1 in December.
The better-than-expected data partly reflects easing pressure due to a prolonged truce in trade tensions with the United States.
They also suggest that manufacturers are increasing production ahead of the New Year holidays, when many companies are closed for days.
Chinese Lunar New Year falls in mid-February this year.
In comments to the meeting carried by Chinese state media on Wednesday, President Xi Jinping pledged to promote “high-quality development” and pursue “more positive macroeconomic policies” while ensuring social harmony and stability.
The world’s second-largest economy is forecast to grow just below the official target of around five percent in 2025, supported by strong activity in high-tech industries and exports.
The official PMI for high-tech manufacturing increased by 2.4 points compared to the previous month, reaching 52.5 in December.
The report stated that both equipment manufacturing and consumer goods sector PMIs reached 50.4.
A separate report by RatingDog, a Chinese credit research and analysis company based in the southern city of Shenzhen, said new export sales fell slightly and hiring weakened despite a rise in overall orders.
“Overall, the manufacturing sector has regained growth at the end of 2025,” RatingDog founder Yao Yu said in a statement.
“However, the improvement was marginal, given that the impact of promotions and new products was impulse-based and their sustainability required monitoring.”
The Office for National Statistics said PMI readings for food, textiles, clothing and electronics were at a relatively strong 53 above.
However, while large manufacturers increased their production, factory activities of small and medium-sized enterprises, which account for the lion’s share of employment in China, tended to shrink.
The report stated that conditions for retailers and restaurants have also worsened as consumers cut back on their spending.
Some economists believe China’s economy is growing more slowly than official figures suggest.
Leaders are grappling with long-term challenges such as a years-long collapse in the country’s real estate sector and overcapacity that has led to damaging price wars in many industries, including automaking.
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