China’s factory activity growth in December misses expectations as experts criticize insufficient stimulus

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.

“Overall, we continue to see the recovery still ongoing,” said Tommy Shih, head of Asia macroeconomic research at OCBC.

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.

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 following a series of stimulus measures introduced since the beginning of the year Late September.

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 Extended the decline for 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.