By Gina Lee
Investing.com – Chinese factory activity rose in December, a surprise move as the country attempts to curb its latest COVID-19 outbreaks.
Data from the National Bureau of Statistics (NBS) released earlier in the day showed that the manufacturing Purchasing Manager’s Index (PMI) increased to 50.3 in December, up from the previous month’s reading of 50.1. Forecasts prepared by Investing.com predicted a 50 figure.
Meanwhile, the non-Manufacturing Purchasing Managers Index (PMI) rose to 52.7 from November’s 52.3.
Economic recovery in the world’s second-largest economy has lost steam since early summer 2021, after an initial recovery in 2020. Slower manufacturing growth, a debt-ridden property sector and resurgence of COVID-19 outbreaks all contributed to the slowdown.
"We expect more liquidity and targeted stimulus packages to be rolled out to support SMEs, high-tech and innovation firms, advanced manufacturing and green industries in order to alleviate the burden on companies, secure growth, reduce risks and offset the slowdown," China Renaissance Securities Head of Macro and Strategy Research Bruce Pang told Reuters.
The industrial and tech city of Xi’an has entered lockdown since 23 December of 2021, as the local outbreak spreads. The move has influenced the factory activity in the city. Two of the world’s largest memory-chip manufacturers Samsung Electronics (OTC:SSNLF) and Micron Technology (NASDAQ:MU) have warned that the lockdown in Xi’an could affect their chip making in the area.
On the COVID-19 front, Zhejiang province brought a small-scale outbreak under control, but some firms were forced to suspend production. The western city of Xi’an remains under lockdown to curb its outbreak.
Investors now await the Caixin manufacturing and Services PMIs, due next week.