Employees work on a production line for power batteries and box chassis for new energy vehicles at a workshop in Huaibei, Anhui Province, China, July 11, 2025.
Li Xin | Visual China Group | Getty Images
China’s economy ended the year on a slightly less gloomy note as factory activity expanded more than expected in December for the first time since March, official data released on Wednesday showed.
The official manufacturing purchasing managers’ index rose to 50.1 in December, beating the 49.2 expected by economists polled by Reuters and above November’s 49.2. Values above 50 indicate expansion.
The composite PMI, a broad measure that tracks activity across manufacturing and services, rose to 50.7 from 49.7 in November, indicating broad improvement in the economy as a whole.
China’s non-manufacturing PMI, which includes services and construction, was 50.2, up from 49.5 in November.
Huo Lihui, chief statistician at China’s National Bureau of Statistics, said new orders increased in December, indicating a “significant expansion” in manufacturing production and demand.
Private sector data showed a similar trend. A separate PMI from independent research firm Rating Dog showed manufacturing activity rose to 50.1 from 49.9, beating expectations of 49.8.
RatingDog founder Yao Yu said the numbers show that manufacturing is back to expansion. He pointed out that total new orders increased for seven consecutive months, supported by domestic new product launches and business development, leading to production growth.
However, Yao said that while businesses remain confident heading into 2026, optimism has receded and remains below historical averages.
According to data from China’s National Bureau of Statistics, large companies led the improvement, with the PMI rising 1.5 points from the previous month to 50.8.
Activities of small and medium-sized enterprises remained sluggish. The PMI index for medium-sized companies rose to 49.8, but the PMI index for small and medium-sized companies fell to 48.6, down 0.5 points from November.
After its release, the market was mixed. hong kong Hang Seng Index fell by 0.83%, while the mainland’s CSI300 rose by 0.33%.
The statistics follow the People’s Bank of China’s decision earlier this week to keep loan prime rates unchanged despite weak economic indicators and a prolonged downturn in the real estate sector plaguing the world’s second-largest economy.
Retail sales and industrial production in November were lower than expected, and fixed asset investment also shrank.
Hao Zhou, chief economist at brokerage firm Guotai Jun’an International, told CNBC’s “Squawkbox Asia” on Wednesday that the numbers were “a very good, positive surprise for the market.”
“The market is probably worried not only about consumption, but also about China’s real estate market and China’s stock market,” Zhou said. “Current data suggests the economy is on the right track and momentum remains strong.”
