A welder at an agricultural machinery manufacturing enterprise in the Zhengzhou Economic Development Zone in Zhengzhou, China, on August 31, 2024.
Coast Photo | norphoto | Getty Images
China's factory activity growth for December missed analysts' expectations on Tuesday, suggesting that Beijing's stimulus measures were not enough to effectively boost the country's faltering economy.
The country's official purchasing managers' index for December It was stated in 50.1, data issued by Data from the National Bureau of Statistics Show.
The reading was lower than Reuters' expectations of 50.3. Manufacturing activity came in at 50.3 in November and 50.1 in October. A PMI reading above 50 indicates expansion in activity, while a reading below that indicates contraction.
Production and new orders for the marginal agriculture and food processing sectors, as well as general equipment and food and beverages, rose, the National Bureau of Statistics said.
China's non-manufacturing PMI, which measures activity in the service and construction industries, rose to 52.2 in December, compared to 50.0 the previous month.
Of the 21 industries surveyed, 17 recorded higher activity than the previous month, including aviation, transportation and communications. The construction industry has also returned to expansion, supported by the upcoming Spring Festival holiday.
“I think one of the reasons there was a big swing in the non-manufacturing PMI last month was partly because the construction PMI fell so much,” said Tommy Shih, head of macroeconomic research for Asia at OCBC.
Investors will also be watching the Caixin/S&P Global Manufacturing PMI scheduled for Thursday.
“For the Chinese economy, 2024 will be remembered as a year of disruption,” said Larry Hu, chief China economist at Macquarie Group.
He added, “The deflationary pressures continued because the political stimulus is sufficient to achieve the GDP target, but it is not enough to revive the economy.”
The Chinese economy has shown some recovery after a series of stimulus measures introduced since 2018 Late September.
“Overall, we still see that the (Chinese) recovery is still ongoing,” Xie said. “China will meet its growth target of about 5% for this year, probably about 4.9%. So we are seeing a small part of the recovery for 2024,” he added.
the The World Bank on Thursday raised its economic growth forecast for China 2024 and 2025, reflecting recent policy adjustments. It now expects China's GDP to grow by 4.9% in 2024 compared to its previous forecast of 4.8%, while in 2025.
However, other recent economic data out of China suggests that the world's second-largest economy remains in the midst of low inflation, largely due to tepid consumer demand and a prolonged contraction in the real estate market.
China's consumer inflation rate fell to its lowest level in five months In November, while The country's export and import figures Below expectations. In addition, the latest Retail sales data was also disappointingBelow Reuters expectations.
Industrial profits in China Extending the decline to the fourth month in a row, down 7.3% in November compared to the previous year.
last week, The Chinese Ministry of Finance announced It will increase financial support next year to help boost consumption by expanding trade in consumer goods, increasing pensions, as well as medical insurance subsidies for residents.
As decided by the Chinese authorities Issuance of special treasury bonds worth 3 trillion yuan (411 billion US dollars) next year – the largest amount ever – to ramp up fiscal stimulus efforts, according to Reuters.
China will face greater challenges with Donald Trump in the White House. Trump's threat to Imposing higher tariffs A ban on Chinese goods could further impact China's export sector, which already faces increasing trade barriers from the European Union.
