China’s December factory activity edges up despite virus outbreaks

Author of the article: BEIJING — China’s factory activity unexpectedly accelerated in December, but only by a small margin, according to an official survey released on Friday, amid disruptions from COVID outbreaks and as the broader economy loses momentum in the fourth quarter. The official manufacturing Purchasing Manager’s Index (PMI) rose to 50.3 from 50.1…
China’s December factory activity edges up despite virus outbreaks

Author of the article:

BEIJING — China’s factory activity unexpectedly accelerated in December, but only by a small margin, according to an official survey released on Friday, amid disruptions from COVID outbreaks and as the broader economy loses momentum in the fourth quarter.

The official manufacturing Purchasing Manager’s Index (PMI) rose to 50.3 from 50.1 in November, data from the National Bureau of Statistics (NBS) showed.

Analysts had expected it to fall slightly to the 50-point mark, which separates growth from contraction.

The world’s second-largest economy has lost momentum since the early summer after rebounding from last year’s pandemic slump, as it grapples with a slowing manufacturing sector, debt problems in the property market, and small-scale COVID-19 outbreaks.

A sub-index for new orders improved slightly in December but remained in contraction, at 49.7 versus 49.4 in November.

New export orders shrank further, with the sub-index coming in at 48.1 compared with 48.5 a month earlier, indicating fragile overseas demand.

A sub-index for production remained in positive territory at 51.4, but was lower than November’s 52.0.

“We expect more liquidity and targeted stimulus packages to be rolled out to support SMEs, high-tech and innovation firms, advanced manufacturing and green industries in order to alleviate the burden on companies, secure growth, reduce risks and offset the slowdown,” said Bruce Pang, Head of Macro and Strategy Research at China Renaissance Securities.

ECONOMIC HEADWINDS

The wealthy Zhejiang province on China’s eastern coast saw a small-scale COVID-19 outbreak in December, which has now subsided, but some firms were forced to suspend production.

In the northwest, the industrial and tech hub of Xian has been under lockdown as a local outbreak continues to spread in the city of 13 million.

Samsung Electronics and Micron Technology , two of the world’s largest memory-chip makers, have warned that the ongoing lockdown of the city could affect their chip manufacturing bases in the area.

Activity in China’s overall services sector grew at a slightly faster pace in December, rising to 52.7 from November’s 52.3.

China’s official composite PMI, which includes both manufacturing and services activity, stood at 52.2, unchanged from November.

Analysts expect a further slowdown in fourth-quarter gross domestic product (GDP) after the economy grew 4.9% in July-September.

Debt crises at major real estate developers amid a crackdown on the property sector have hurt an industry critical to China’s economic growth.

The central bank has said it will keep monetary policy flexible next year as it seeks to stabilize growth and lower financing costs for businesses amid growing economic headwinds.

China will face “unprecedented” difficulty in stabilizing trade next year, Vice Commerce Minister Ren Hongbin said on Thursday, as production capacity in other exporting countries recovers from COVID-induced shocks and competes with Chinese exports. (Reporting by Ryan Woo and Gabriel Crossley; editing by Richard Pullin)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Microsoft shareholders back proposal that seeks report on its sexual harassment policies
Read More

Microsoft shareholders back proposal that seeks report on its sexual harassment policies

This advertisement has not loaded yet, but your article continues below. Author of the article: Article content Microsoft Corp said on Tuesday its shareholders had approved a proposal by Arjuna Capital, which sought a report from the software firm on its policies to battle sexual harassment at workplace. (Reporting by Abhijith Ganapavaram in Bengaluru; Editing…
Baker Hughes Warns of Broad Inflation After Missing Estimates
Read More

Baker Hughes Warns of Broad Inflation After Missing Estimates

Author of the article: Bloomberg News David Wethe (Bloomberg) — Baker Hughes Co. tumbled by the most in two years after warning that sales in Russia would continue to erode amid sanctions on the warring nation. The world’s No. 2 oilfield contractor has struggled to move people and equipment into Russia, one of the biggest…
Crypto lender Celsius defends bitcoin mining plans as bankruptcy kicks off
Read More

Crypto lender Celsius defends bitcoin mining plans as bankruptcy kicks off

Author of the article: Cryptocurrency lender Celsius Network said bitcoin mining is key to the company’s restructuring efforts at a U.S. bankruptcy court hearing on Monday in Manhattan. New Jersey-based Celsius received approval from U.S. Bankruptcy Judge Martin Glenn to spend $3.7 million in construction costs at a new bitcoin mining facility and $1.5 million…
France Wants Europe to Cut Its Energy, Raw-Materials Dependence
Read More

France Wants Europe to Cut Its Energy, Raw-Materials Dependence

Author of the article: Bloomberg News John Ainger (Bloomberg) — France wants the European Union to reduce its dependence on countries such as Russia and China for both energy and the raw materials needed to drive the green revolution. The 27-member bloc should ensure it’s not reliant on China when it comes to producing high-tech…