Deutsche Welle Chinese Edition recently reported that, according to official data released by the Chinese National Bureau of Statistics, China’s manufacturing Purchasing Managers Index (PMI) in December was 49.0 percent, a decrease of 0.4 percentage points from the previous month. China’s PMI has been declining for three consecutive months and has now hit a new six-month low. The PMI was also below the Reuter’s estimated median forecast of 49.5 percent.
China’s National Bureau of Statistics said that the decline in manufacturing PMI was affected by factors such as the low production rates of some raw materials during the off-season. Some economists expressed the belief that China must take government action to increase support for the economy, lest the trend of slow growth should continue. Analysts expect the central bank to lower interest rates and the bank reserve requirement ratio (RRR) during the coming weeks.
The data from the Bureau of Statistics also showed that, in December, the new orders sub-index of the PMI was 48.7 percent, a decrease of 0.7 percentage from the previous month. This indicates that demand in the manufacturing market has declined. The employment sub-index was 47.9 percent, a decrease of 0.2 percentage from the previous month, indicating that employment in manufacturing has declined. The Bureau’s senior statistician said that the external environment (referring to China’s relationship with other countries) is “increasingly complex, severe, and uncertain.” He added that the reduction of overseas orders and insufficient effective domestic demand are the main difficulties facing Chinese companies.
Source: DW Chinese, December 31, 2023