China’s factory activity snaps out of slump

But economists doubt momentum can last

- JOE CASH XIUHAO CHEN

Employees work on camera lenses for mobile phones at a factory in Lianyungang, Jiangsu province, China.REUTERS

(REUTERS)

China's factory activity unexpectedly grew in December, snapping a record eight straight months of decline, lifted by a rise in pre-holiday orders as officials seek to spur the $19 trillion economy's manufacturing sector without worsening deflation.

The official purchasing managers’ index (PMI) rose to 50.1 in December from 49.2 in November, the National Bureau of Statistics’ survey showed yesterday, topping the 50-point mark separating growth from contraction and beating a forecast of 49.2 in a Reuters poll.

“Assuming the improvement in the PMIs is borne out in the hard data, we think it will likely be a short-lived upturn in activity on the back of month-to-month swings in fiscal spending rather than the start of a more sustained pickup,’ said Julian Evans-Pritchard, head of China economics at Capital Economics.

“The big picture is that the structural headwinds from the property downturn and industrial overcapacity are set to persist in 2026,” he added.

Still, the data should give policymakers cause for optimism after choosing to see out 2025 without major additional stimulus to meet the full-year growth target of around 5%.