China's factory activity edges back to growth in December, private PMI shows

BEIJING: China's ⁠factory activity returned to marginal expansion in December, as stronger production and domestic demand offset a decline in foreign orders, a private-sector survey showed on Wednesday.

The RatingDog China General Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose ‌to 50.1 in December ‌from 49.9 in November. The 50-mark separates growth from contraction. That aligned with an official PMI released earlier on Wednesday that ‌showed activity unexpectedly rising.

"The manufacturing sector regained growth at the end of 2025. However, the improvement was marginal, with the impact of promotions and new products appearing impulse-driven and their sustainability requiring observation," said Yao Yu, Founder at RatingDog.


The world's second-largest economy remains on track to meet its full-year growth target ​of "around 5%" for 2025, despite a trade war with the ​U.S., a prolonged property slump and generally weak domestic demand.

In contrast, the Rhodium Group ‌estimates China's economy grew ‍by just 2.5% to 3% this year, roughly half the pace suggested ‍by official data, citing a collapse in fixed-asset investment in the ‌second half.

Chinese leaders this month pledged to maintain a "proactive" fiscal stance and to flexibly employ monetary tools, including cuts to banks' reserve requirements ratios and interest rates, to bolster economic growth in the coming year.

The survey pointed to slight improvements in both supply and demand. Total new orders expanded at a somewhat faster pace, supported by domestic demand, while subdued external conditions pushed new export orders back into marginal contraction.

Notably, producers raised export charges ‍at the fastest pace since July 2024 to defend profit margins. Meanwhile, employment contracted for a second consecutive month, attributed to corporate restructuring and cost-control measures.

Input costs ‍rose more ⁠sharply in December, driven primarily by ⁠higher raw material prices, especially metals. Despite these cost pressures, manufacturers continued to lower selling prices to stimulate sales and reduce inventories.

On inventories, stocks of purchases returned to expansion, while stocks of finished goods continued to decline as firms met orders from existing holdings.

The sub-index measuring business confidence eased slightly in December but remained in expansionary territory.

The RatingDog index sometimes diverges from the official PMI due to differences in survey coverage and sampling. It is a better gauge of smaller, export-oriented service providers along China's east coast, while the official PMI mainly tracks large and medium-sized firms.