China's manufacturing PMI enters expansion zone in December as confidence rebounds

The purchasing managers' index (PMI) for China’s manufacturing sector rose to 50.1 in December, up 0.9 percentage points from the previous month, according to official data released Wednesday. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

The production sub-index stood at 51.7, up 1.7 percentage points from November. On the demand side, the new orders sub-index rose to 50.8, up 1.6 percentage points, marking the first time since the second half of the year that new orders have crossed the critical 50-point threshold. The figures reflect a return to the expansion zone following November’s PMI of 49.6.

“Among the 21 industries surveyed, 16 reported an increase in PMI compared to the previous month, indicating an improvement in the production and operations of relevant enterprises. Additionally, driven by the recovery in production and demand in the manufacturing industry, corporate procurement activities have accelerated, with this month’s procurement volume index returning to the expansion zone,” said Huo Lihui, director of the Business Climate Survey Division of the NBS Service Survey Center.

Key industries also showed stronger growth, with the high-tech manufacturing PMI reaching 52.5 percent, up 2.4 percentage points from the previous month. Meanwhile, the production and operation activity expectations sub-index climbed to 55.5, up 2.4 percentage points, indicating growing confidence among manufacturing enterprises in recent market developments.

“Supported by a series of major policies, enterprise confidence has seen a notable rebound. The sub-index for production and operation activity expectation rose to a relatively strong level of 55.5 percent,” said He Hui, vice president of the China Federation of Logistics and Purchasing (CFLP).

-China Central Television/Reuters