BEIJING (Reuters) – Factory activity in China grew in December but at a slower pace than expected, as overall sales were affected by a drop in export orders amid concerns about trade prospects, a private sector survey showed on Thursday.
The data was in line with an official survey released on Tuesday that showed manufacturing activity expanded modestly, reinforcing calls for more stimulus to stimulate growth this year as Donald Trump takes office soon and is likely to exacerbate trade tensions between the United States and China.
The Caixin/S&P Global Manufacturing PMI fell to 50.5 in December from 51.5 the previous month, below analysts' expectations in a Reuters poll of 51.7.
The rate of expansion in production fell to its lowest levels in three months as the growth of new orders slowed.
New export orders, in particular, are back in contraction territory, recording a fourth month of decline in the past five months. Weak external economic conditions and threats of new US tariffs pose significant risks to the world's largest exporter of goods.
While some Chinese exporters and US buyers may have recently increased shipments in anticipation of Trump's tariffs, a report published by China Beige Book suggested that last-minute pushes may be tapering off.
“The trade push ahead of tariffs expected in 2025 is over. The only saving grace on an annual basis is if Trump’s talk of Chinese tariffs is just bunk,” China Page Book said.
Since Beijing unveiled a series of policy support measures late last year, some sectors have seen economic activity stabilize. Markets are watching Beijing's next policy steps, as policymakers make reviving domestic demand a priority.
Chinese manufacturers maintained an optimistic view on production in 2025 despite optimism falling to its lowest levels since September. Their concerns about growth and trade prospects, especially amid threats of US tariffs, have challenged hopes for policy-driven new product sales growth this year.
Growth in purchasing inventory and post-production inventory buildup declined in December.
Employment levels fell for the fourth straight month, but the rate of job losses was lower than in November.
Average selling prices fell for the first time since September, in contrast to another rise in input prices.
Participants said they absorbed cost increases and lowered selling prices to support sales. Export duties also decreased.
“The external environment is expected to be more complex this year, requiring early policy preparation and immediate response,” said Wang Qi, economist at Caixin Insight Group, calling for official efforts to increase household incomes and improve people's livelihoods.
Policymakers pledged to increase pensions and expand the consumer goods trade scheme in 2025, adding that they would work to increase household income and “strongly boost consumption.”
