China manufacturing activity grows for third straight month

BEIJING

Workers labor at a factory of coolant radiators for air conditioners in Yuexi county in central China's Anhui province, on Feb. 21, 2024.

China's manufacturing activity expanded in December for the third month in a row, official data showed on Tuesday, as leaders fight to reverse a slowdown in the world's number two economy.

The country has struggled to climb out of a slump fuelled by a property market crisis, weak consumption and soaring government debt.

China's Purchasing Managers' Index (PMI), a key measure of industrial output, was 50.1 in December, marking a third consecutive month of expansion, according to the National Bureau of Statistics.

Tuesday’s figure was lower than Bloomberg analysts' prediction of 50.2, but still above 50, which indicates an expansion in manufacturing activity.

A reading below that shows a contraction.

The key indicator slid for six months in the middle of the year before returning to expansion territory in October.

Beijing has unveiled a string of aggressive measures in recent months aimed at bolstering growth, including cutting interest rates, cancelling restrictions on homebuying and easing the debt burden on local governments.

But economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore full health in China's economy, which has struggled to fully recover since the Covid-19 pandemic.

"The official PMIs suggest that the economy gained momentum in December, driven by faster growth in the services and construction sectors," Gabriel Ng of Capital Economics wrote in a note to clients Tuesday.

The International Monetary Fund expects China's economy to grow by 4.8 percent this year and 4.5 percent next year.