BEIJING, Dec 31, (V7N): China's manufacturing activity continued its recovery in December, marking the third consecutive month of expansion as government efforts to reverse a prolonged economic slowdown show signs of effectiveness.

The official Purchasing Managers' Index (PMI) for manufacturing reached 50.1 in December, just above the 50-point threshold that separates growth from contraction, according to the National Bureau of Statistics. This follows expansions recorded in October and November, signaling cautious optimism for the world's second-largest economy.

The December PMI figure, though slightly below analysts’ forecast of 50.2, highlights sustained recovery momentum after six months of contraction earlier this year.

Recovery Amid Challenges
China’s economy has faced headwinds from a persistent property market slump, weakened consumer demand, and soaring government debt. In response, Beijing has introduced aggressive measures to bolster growth, including interest rate cuts, removal of homebuying restrictions, and debt relief for local governments.

However, economists caution that while these steps have supported manufacturing and services, more direct fiscal stimulus targeting domestic consumption is necessary for a comprehensive recovery.

Service Sector Growth
The non-manufacturing PMI, which measures activity in the services and construction sectors, climbed to 52.2 in December, up from 50.0 in November. This improvement indicates renewed vigor in these sectors, bolstered by year-end policy initiatives and increased construction activity.

Export Gains and Future Outlook
Export orders rose to a four-month high, attributed in part to U.S. importers ramping up orders ahead of potential tariff changes under the Trump administration. This export uptick, coupled with policy support, has contributed to China’s economic momentum in late 2024.

While Beijing has set an ambitious growth target of 5% for 2024, the International Monetary Fund (IMF) forecasts slightly lower growth at 4.8% for this year and 4.5% for 2025. Despite the challenges, the continued expansion in manufacturing and services offers hope for sustained recovery in 2025.

Manufacturing PMI at 50.1 in December signals continued expansion.

Non-manufacturing PMI rose to 52.2, reflecting growth in services and construction.

Export orders hit a four-month high, aiding economic recovery.

Economists emphasize the need for direct fiscal stimulus to boost consumption.

China’s leadership remains optimistic but cautious as it navigates the path to sustained economic stability.

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