Beijing- China’s manufacturing sector unexpectedly returned to growth in December 2025, ending a record eight-month contraction in factory activity, according to official government data released Wednesday. The official Purchasing Managers’ Index (PMI) climbed to 50.1 in December, up from 49.2 in November. A reading above 50 signals expansion, meaning factories expanded output and orders for the first time since April 2025. Analysts said much of the improvement appeared linked to pre-Lunar New Year stockpiling, as manufacturers ramped up production and inventories ahead of the holiday period. Production and new orders both reached their highest levels since March, while supplier deliveries improved, suggesting firms were more optimistic at year’s end.

Export orders stayed weak amid a slowing global economy and ongoing trade tensions with the United States, leaving external demand fragile. At the same time, domestic demand has failed to pick up strongly, weighed down by low household confidence and a prolonged real estate downturn that continues to sap consumer spending and investment. The broader economy also showed mixed signals. The non-manufacturing PMI, which covers services and construction, hovered barely above contraction territory, pointing to persistent pressures beyond factories. Economists warn that while December’s data offers a welcome break from contraction, it may prove temporary rather than a sign of a sustainable recovery. Much depends on whether consumer demand strengthens and structural issues such as overcapacity and property market weakness are addressed in the months ahead.