China's Private Sector Sees Growth in December

In December, China's private sector showed positive signs of growth as government fiscal stimulus and a loose monetary policy helped support the economy during the year's end. This growth was highlighted in reports released on Tuesday.

The manufacturing Purchasing Managers' Index (PMI) dipped slightly to 50.1 in December from 50.3 in November, according to data from the National Bureau of Statistics. Analysts had predicted that the index would remain steady at 50.3. Despite this drop, the manufacturing PMI has remained above the crucial 50.0 mark for the third consecutive month, indicating an ongoing expansion in this sector.

On the other hand, the non-manufacturing PMI experienced a surprising increase, rising to 52.2 in December, compared to 50.0 in the previous month. This increase was above expectations, which had forecast a moderate rise to 50.2.

As a result of these figures, the official composite PMI improved to 52.2, up from 50.8 in November, suggesting robust overall growth.

Gabriel Ng, an economist from Capital Economics, mentioned that the economy gained a noticeable momentum in December, driven primarily by stronger growth in the services and construction sectors. He highlighted that the increased fiscal support from the government could continue to stimulate economic growth, especially since deficit spending is anticipated to be front-loaded at the start of 2025.

However, Ng also cautioned that this positive boost may only be temporary and may not last beyond a few quarters. He pointed out potential challenges, including the likelihood of tariffs being pursued and ongoing structural imbalances that could weigh on the economy.

China, Economy, Growth