According to the report from the National Bureau of Statistics (NBS), the manufacturing sector continued to expand in December, while the growth rate accelerated compared to October. However, disruptions in production amid Covid outbreaks and the recent slowdown in economic growth have put pressure on the sector.
The report showed that the manufacturing PMI was 50.3 points in December compared to 50.1 points in October. Economists had expected a decline to 50. A value above the level of 50 points indicates an expansion of the industry, below - a reduction. The index is one of the main indicators of the situation in the Chinese economy, since production quickly reacts to changes in market conditions and purchasing managers may have the most objective and relevant point of view regarding the situation in the sector.
The data showed that the index of new orders rose to 49.7 points in December, compared with 49.4 points in November. Meanwhile, the index of new export orders fell to 48.1 points from 48.5 points in November, and the production index fell to 51.4 points from 52.0 points.
Meanwhile, the non-manufacturing PMI rose to 52.7 points in December from 52.3 points in November. Economists had expected a decline to 52.0 points.
The composite PMI index, reflecting the change in activity in the manufacturing sector and the service sector, remained at 52.2 points.
Experts predict that China's economy continued to slow down in the 4th quarter, while the Central Bank signaled the continuation of a flexible policy in 2022 in order to support growth and reduce financing costs for enterprises.