Return to the expansion zone! China’s official manufacturing PMI in December was 50.1, and non-manufacturing PMI was 50.2

# Source: Wall Street Insights

On December 31, data released by the National Bureau of Statistics (NBS) showed that China's official Manufacturing Purchasing Managers' Index (PMI) stood at 50.1 in December, rising into the expansionary territory for the first time since April, with the previous reading at 49.2. China's official Non-Manufacturing PMI came in at 50.2 in December, compared with the prior figure of 49.5. The country's official Composite PMI reached 50.7 in December, up 1.0 percentage point from the previous month and following the prior reading of 49.7. All three major indices moved into the expansion zone, indicating an overall recovery in China's economic prosperity.

## Manufacturing PMI Enters Expansionary Range for the First Time Since April

In December, the Manufacturing Purchasing Managers' Index (PMI) registered at 50.1%, an increase of 0.9 percentage points from the previous month, moving into the expansionary territory. Among the 21 industries surveyed, the PMI of 16 industries rebounded from the previous month, reflecting improvements in the production and operation conditions of the relevant enterprises.

From the perspective of enterprise size:

- The PMI of large-sized enterprises returned to the expansionary range, coming in at 50.8%, up 1.5 percentage points month-on-month and staying above the critical point.

- The PMI of medium-sized enterprises stood at 49.8%, an increase of 0.9 percentage points from the previous month but still below the critical point.

- The PMI of small-sized enterprises came in at 48.6%, down 0.5 percentage points month-on-month and remaining below the critical point.

Among the five sub-indices that make up the Manufacturing PMI:

- The Production Index hit 51.7%, up 1.7 percentage points from the previous month, indicating that manufacturing enterprises accelerated their production activities.

- The New Orders Index stood at 50.8%, an increase of 1.6 percentage points month-on-month, signaling a pickup in market demand for the manufacturing sector.

- The Raw Material Inventory Index registered at 47.8%, up 0.5 percentage points from the previous month, suggesting that the decline in the stock of major raw materials among manufacturing enterprises narrowed.

- The Employment Index came in at 48.2%, down 0.2 percentage points month-on-month, indicating a slight dip in the employment sentiment of manufacturing enterprises.

- The Supplier Delivery Time Index reached 50.2%, an increase of 0.1 percentage points from the previous month, meaning that the delivery time of raw material suppliers to manufacturing enterprises continued to shorten.

## Non-Manufacturing PMI Rebounds; Service Sector Sentiment Improves Modestly

In December, the Non-Manufacturing Business Activity Index came in at 50.2%, up 0.7 percentage points from the previous month, returning to the expansionary territory.

By industry:

- The Business Activity Index for the construction sector stood at 52.8%, an increase of 3.2 percentage points from the previous month.

- The Business Activity Index for the service sector registered at 49.7%, up 0.2 percentage points month-on-month. Among service industries, the Business Activity Indices for sectors such as telecommunications, radio, television and satellite transmission services, monetary and financial services, and capital market services all stayed in the high prosperity range of over 60.0%; while the indices for retail, catering and other industries remained below the critical point.

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