Chinese Manufacturing Activity Unexpectedly Rises in December

China’s manufacturing activity unexpectedly inched up in December despite COVID-19 disruptions, although analysts warn that the broader economy will slow down in the near term.

The National Bureau of Statistics (NBS) announced that the official manufacturing Purchasing Managers’ Index (PMI) rose to 50.3 in December from 50.1 the previous month.

Meanwhile, the non-manufacturing PMI rose to 52.7 from November’s 52.3.

Economists had expected the index to fall below 50 points since China had been facing economic headwinds from the COVID-19 outbreaks and its disruptions on factory activity, debt problems in the property market, and climate change policies.

A sub-index for new orders for goods improved slightly at 49.7, from 49.4 in November. New exports, however, shrank to 48.1 from the previous 48.5, suggesting that overseas demand have dropped.

Xi’an City, an industrial hub, has been under lockdown due to outbreaks, affecting factories within the area. Some firms in Zhejiang province were also forced to suspend production due to lockdowns.

China’s official composite PMI, including both manufacturing and services activity, was unchanged from November at 52.2. Analysts expect overall growth for the fourth quarter to slow down.

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