China's Private Sector Shows Growth in December

According to recent official survey results, China's private sector saw growth at the close of the year due to fiscal stimulus and loose monetary policies that provided immediate support for economic expansion.

The manufacturing Purchasing Managers' Index (PMI) recorded a slight decline, decreasing to 50.1 in December from 50.3 in the previous month. This data, released by the National Bureau of Statistics, was anticipated to remain steady at 50.3. Nonetheless, the index has stayed above the critical level of 50.0 for three months in a row, indicating continued expansion within the sector.

On the other hand, the non-manufacturing PMI experienced a significant increase, rising unexpectedly to 52.2, up from 50.0 in the previous month. Analysts had forecasted a modest increase to 50.2.

This uptrend resulted in an official composite PMI of 52.2, an increase from 50.8 in November. Economist Gabriel Ng from Capital Economics noted that the economy experienced enhanced momentum in December, primarily driven by robust growth in the services and construction sectors.

Ng further observed that the heightened fiscal support is expected to sustain economic growth, especially as deficit spending is likely to be prioritized at the beginning of 2025. However, he cautioned that this boost might only last a few quarters, citing concerns about potential tariff threats and ongoing structural imbalances that may continue to challenge the economy.

China, Private, Sector