China’s manufacturing activity has expanded for the first time in eight months, driven by an increase in pre-holiday orders, according to the latest data from the National Bureau of Statistics (NBS).
The official Purchasing Managers’ Index (PMI) rose to 50.1 in December, up from 49.2 in the previous month. A reading above the key 50-mark separates expansion from contraction.
The country’s non-manufacturing sector, which covers construction and services, also returned to expansionary territory, rising 1 percentage point to 50.7 in December.
Meanwhile, the PMI for large enterprises increased by 1.5 percentage points to 50.8 and the reading for medium-sized enterprises rose by 0.9 percentage points to reach 49.8, the NBS data showed.
However, the PMI for small businesses continued to contract, falling 0.5 percentage points to 48.6.
Huo Lihui, chief statistician at the NBS, said the PMI data signalled an overall improvement in China’s economy.
It has been a challenging year for China, with US President Donald Trump targeting the world’s second-largest economy with punishing tariffs, prompting tit-for-tat duties between the two countries that reached as high as 145% on China and 125% on the US.
However, China – the world’s largest manufacturer for the past 15 years – is on track to reach its 5% growth target in 2025, Chinese President Xi Jinping said during his annual address to the Chinese People’s Political Consultative Conference on 31 December.
“Our economic output has crossed thresholds one after another and it is expected to reach 140tn yuan [US$19.9tn] this year,” Xi told the gathering.
In a separate private-sector reading released on 31 December, the RatingDog China General Manufacturing PMI survey found that China’s factories also returned to growth in December.
Compiled by research company RatingDog and S&P Global, the PMI rose to 50.1, from 49.9 in November, boosted by higher inflows of new work despite a slight fall in new export sales.
“On a sub-index basis, slight overall improvements in supply and demand drove this month’s fractional growth,” Yao Yu, founder of RatingDog, said.
“While subdued external conditions pulled new export orders back into marginal contraction, total new orders expanded for the seventh consecutive month, supported by domestic new product launches and business development.”
Business sentiment among Chinese manufacturers is also positive for 2026, with expectations that expansion plans and new products will support growth in sales and production, according to the RatingDog report.
“With the Central Economic Work conference emphasising ‘seeking progress while maintaining stability’ and addressing ‘involutionary’ competition, policy support is expected to facilitate a continued moderate recovery in 2026,” Yao said.