Chinese Manufacturing Activity Less Than Expected in December

Investing.com– Chinese manufacturing activity grew less than expected in December, according to private purchasing managers index data released on Thursday. The impact of recent stimulus measures appears to be fading.

The Caixin manufacturing PMI registered 50.5 in December, falling short of the 51.6 expectation and down from the previous month’s 51.5. This slowdown is attributed to declining export orders and a decrease in business optimism about China’s economic future.

This report follows government PMI data indicating an expansion in the manufacturing sector in December, although at a slightly slower pace than anticipated.

The Caixin data differs from the official figures in scope, as the government survey mainly focuses on larger, state-run enterprises in the north, while the Caixin survey includes smaller private companies in the south. Investors often utilize both metrics for a comprehensive understanding of the Chinese economy.

Despite significant stimulus measures introduced by Beijing since late September, there have been no targeted fiscal measures announced, likely due to the uncertainty surrounding U.S. trade policies under incoming President Donald Trump.

Trump has pledged to implement steep trade tariffs on China, which could negatively impact the world’s second-largest economy as it seeks to stabilize growth. Beijing is also anticipated to introduce retaliatory actions, potentially igniting a renewed trade war with Washington.

Nonetheless, the Chinese government is expected to introduce stronger stimulus measures in light of increasing trade challenges.