China Manufacturing PMI Shrinks for 5th Straight Month in Dec – Caixin

Chinese manufacturing activity shrank for a fifth straight month in December, a private survey showed on Tuesday, as the country grappled with an unprecedented spike in COVID-19 cases after it relaxed some restrictions intended to prevent the spread of the virus. The Caixin Manufacturing Purchasing Managers Index (PMI) read 49.0 in December, higher than forecasts for 48.8 but weaker than last month’s reading of 49.4. A reading below 50 indicates contraction, with December marking the fifth straight month that the manufacturing PMI has spent in contraction territory. The data was largely in line with government data released last week, which also showed that the country’s manufacturing sector shrank in December. China’s manufacturing sector is a bellwether for economic conditions in the country, given that it is closely tied to the Asian giant’s massive exports. Output slowed substantially in 2022 amid continued disruptions from COVID-related headwinds, as well as worsening overseas demand for Chinese goods. “Both manufacturing supply and demand continued to shrink last month. Fallout from the pandemic was a drag on production and sales, with the subindexes for output and total new orders staying below 50 for the fourth and fifth straight months, respectively,” Wang Zhe, Senior Economist at Caixin Insight Group wrote in a note.

China manufacturing

While the Country Has Now Begun Relaxing its Strict Anti-COVID Measures.

it is now facing a massive spike in infections. Analysts expect this trend to delay a broader reopening in the country, as it faces an increased infection and death count from the virus. Still, markets are holding out for an eventual reopening in the country this year. Traders piled heavily into Chinese stocks and debt towards the end of 2022, seeing the space as a bargain buy after a heavy selldown earlier in the year. This was also reflected in increased business optimism among Chinese manufacturers, according to the Caixin data. Firms are positioning for an eventual economic recovery after the country began easing COVID-19 restrictions in December. President Xi Jinping also recently said that China’s economy grew 4.4% in 2022 – a figure that is much higher than markets were anticipating. But he also noted that the country faces increased headwinds from the COVID-19 pandemic in the coming months.

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Asia FX Steadies as Dollar Rebound Slows Ahead of Fed Minutes

Most Asian currencies rose slightly on Wednesday as a recovery in the dollar appeared to have run out of steam, with markets now awaiting fresh cues on U.S. monetary policy from the minutes of the Federal Reserve’s December meeting. Regional currencies came under pressure on Tuesday as sentiment was dented […]

You May Like

Subscribe US Now

Error: Your Requested widget " newsletterwidget-2" is not in the widget list.
  • [do_widget_area fullwidth-homepage-sidebar]
    • [do_widget_area sidebar-1]
      • [do_widget id="search-2"]
      • [do_widget id="recent-posts-2"]
      • [do_widget id="archives-2"]
      • [do_widget id="categories-2"]
    • [do_widget_area widgets_for_shortcodes]
      • [do_widget id="newsletterwidget-2"]
    • [do_widget_area wp_inactive_widgets]