The official manufacturing purchasing managers’ index (PMI) fell to 49 in December from November’s 49.4, hitting a six-month low, and contracting for a third straight month. The National Bureau of Statistics (NBS) pointed to an “increasingly complicated, tough and uncertain” external environment as a key reason for the continued fall. Zhao Qinghe, NBS Statistician, said a reduction in overseas orders, as well as insufficient demand from the domestic market, were the major difficulties for firms last month. Analysts at Goldman Sachs said that among the major subindices, the new orders subindex decreased the most, followed by the output subindex. In contrast, the Caixin/S&P Global manufacturing PMI rose to 50.8 in December from 50.7 in November. Analysts at Capital Economics said the average new orders component held steady, consistent with modest but positive growth in domestic demand, but downward pressure on foreign demand had not abated as the export orders component continued to point to declines in exports.
China’s official services PMI stood at 50.4 in December, a mild improvement after it had slipped to 50.2 in November, which had been the lowest point since December 2022. The subindex for business activity in the services sector remained unchanged at 49.3 in December compared with November, while the construction subindex jumped to 56.9 from 55 in November. Analysts at Capital Economics said most of the fall in the headline figure could be attributed to further weakness in the real estate, capital markets services and water transport sectors. Other modes of transport, communication, and financial services sectors, though, continued to see strong gains, they added. Again in contrast to the official gauge, the Caixin/S&P Global services PMI rose to 52.9 in December from November’s 51.5, posting the highest reading since July.
China’s official composite PMI, which is composed of both manufacturing and services, fell to 50.3 in December, slightly down from a reading of 50.4 in November, hitting a one-year low. Meanwhile, the Caixin/S&P’s composite PMI rose to 52.6 last month from November’s 51.6, and to the highest reading since May. “All told, the average of the official and Caixin composite PMIs rose for a second month, from 50.4 to 51.5. But it is still below pre-pandemic levels, as the average in 2019 was 52.5,” said analysts at Capital Economics.
Arrivals and departures from mainland China were back to pre-Covid levels over the New Year holiday period, beating expectations, immigration authorities said. There were some 5.18 million border crossings across mainland China between December 30 and January 1 – nearly a fivefold increase from a year ago, the National Immigration Administration (NIA) said. It took the arrivals and departures to the same level recorded in 2019, before the Covid-19 pandemic swept across China. Domestic travel also bounced back over the New Year holiday, with 135 million trips taken nationwide, up 155.3% from the same time last year and a rise of nearly 10% from the pre-Covid level in 2019. Tourism revenue tripled from the same time in 2022 and was up 5.6% from the New Year holiday in 2019. In December, some 214,000 travelers arrived from France, Germany, Italy, the Netherlands, Spain and Malaysia – up 28.5% from the previous month, the Administration said. Travelers from those six countries can enter China for a stay of up to 15 days without a visa.
