Chinese factory activity expanded for the first time in eight months in December, according to purchasing managers’ surveys released Wednesday.
The official manufacturing purchasing managers index, a monthly survey of companies, rose to 50.1 in December, just above the 50 level that separates expansion from contraction. A private sector survey also came in at 50.1 for the month.
The surveys said the improvement was linked to an orders rebound ahead of holidays, with builders and other firms rushing to finish projects before scheduled closures. They also pointed to easing pressure from an extended truce in trade tensions with the United States.
China’s government and industry activity around the upcoming holiday season also played a role, the report said, as manufacturers ramped up production ahead of New Year holidays. China’s Lunar New Year is expected to fall in mid-February this year.
In comments carried by state media during a new year’s gathering on Wednesday, President Xi Jinping said he would promote “high-quality development” and carry out “more positive macroeconomic policies” while ensuring social harmony and stability.
Separate official figures cited in the surveys showed stronger performance in parts of manufacturing. The official PMI for high-tech manufacturing stood at 52.5 in December, up 2.4 percentage points from the previous month. The report also said PMIs for both equipment manufacturing and the consumer goods industry reached 50.4.
The National Bureau of Statistics said PMI measures for food, textiles, clothing and electronics were above “relatively strong 53,” indicating strength in several consumer-linked categories.
Still, the report described uneven momentum. While large manufacturers increased output, factory activity for small and mid-sized enterprises that account for much of China’s employment remained in contractionary territory. It also said conditions for retailers and restaurants deteriorated as consumers cut back on spending.
Another survey from RatingDog, a Chinese credit research and analysis company based in Shenzhen, said that despite an increase in overall orders, new export sales fell slightly and hiring weakened. RatingDog founder Yao Yu said in a statement, “Overall, the manufacturing sector regained growth at the end of 2025,” but added, “However, the improvement was marginal, with the impact of promotions and new products appearing impulse-driven and their sustainability requiring observation.”
RatingDog attributed some of the strain to cost pressure, saying higher costs for raw materials—especially metals—put pressure on company profit margins. It said exporters raised prices for the first time in three months to help offset higher costs.
Analysts said the late-2025 lift could fade. Julian Evans-Pritchard of Capital Economics said in a report that structural headwinds from a property downturn and industrial overcapacity are set to persist in 2026, and that there appears to be limited appetite among policymakers for a big increase in demand-side stimulus.
The surveys also reflected longer-running worries about China’s growth outlook, including a yearslong slump in the property sector and excess capacity in industries such as automaking that has driven price wars.