China's Private Sector Sees Year-End Growth

China's private sector demonstrated expansion at the close of the year, buoyed by fiscal stimulus and lenient monetary policies that offered immediate support to growth, according to recent official survey results.

In December, the manufacturing Purchasing Managers' Index (PMI) fell slightly to 50.1 from 50.3 in November, as reported by the National Bureau of Statistics. This figure was predicted to remain steady at 50.3. Nevertheless, the index has stayed above the critical mark of 50.0 for three consecutive months, indicating ongoing growth in the manufacturing sector.

On the other hand, the non-manufacturing PMI rose more than anticipated, increasing to 52.2 from 50.0 the previous month. Analysts had expected a modest rise to 50.2.

Consequently, the official composite PMI also increased to 52.2, up from 50.8 in November, suggesting a more robust performance in various sectors.

According to economist Gabriel Ng from Capital Economics, the economy gained strength in December, driven largely by rapid growth in the services and construction sectors. Ng highlighted that the economic growth should benefit from increased fiscal support, especially as deficit spending is expected to be prioritized in the early months of 2025.

However, he noted that this economic boost may be temporary, lasting only a few quarters. Challenges such as potential tariff actions and ongoing structural imbalances could exert pressure on the economy moving forward.

China, Private, Sector