In December, the Composite PMI for the Chinese economy returned to expansionary territory, rising to 50.7 points from 49.7 in November.
Sectoral breakdown
This modest expansion is notable because both the non-manufacturing and manufacturing sectors simultaneously returned to growth, with the non-manufacturing sector increasing from 49.5 to 50.2 points and the manufacturing sector rising from 49.2 to 50.1 points after eight consecutive months of contraction.
High-technology manufacturing is driving the recovery in manufacturing, reaching 52.5 points, while traditional industries remain in contraction.
Growth profile and outlook
While these figures do not necessarily signal the start of a prolonged expansion and domestic demand continues to disappoint, they show that China’s production profile is evolving, with new drivers of growth emerging.
Having come close to its growth target in 2025, the Chinese economy should be able to achieve a similar outcome in 2026. Lower credit costs and additional fiscal stimulus are expected to contribute to this trajectory.
We invest in China across all our portfolios.