China's factory activities continue to rebound in December under gov't support

BEIJING, Dec. 31 (Xinhua) -- China's factory activities continued to rebound in December as the government's supportive measures paid off, official data showed Friday.

The purchasing managers' index (PMI) for China's manufacturing sector came in at 50.3 in December, up from 50.1 in November, according to data from the National Bureau of Statistics (NBS).

A reading above 50 indicates expansion, while a reading below reflects contraction.

The rise came after the country had revved up support to ensure adequate supply, stabilize market prices and ease the pressure on companies, said NBS senior statistician Zhao Qinghe.

In December, the sub-index measuring purchase prices of major raw materials dropped 4.8 percentage points from November to 48.1. The ex-factory price index fell to 45.5, down 3.4 percentage points from last month.

This is the second consecutive month that the two indices saw a decline.

The sub-index for production reached 51.4, remaining in the expansion area, which reflects the growth momentum of the manufacturing sector.

The sub-indexes for high-tech manufacturing and equipment manufacturing stood at 54 and 51.6 in December, respectively, both higher than the overall PMI of the manufacturing sector.

With the manufacturing PMI continuing to climb in the expansion zone, China's full economic recovery has been further consolidated, according to Zhang Liqun, a researcher with the Development Research Center of the State Council.

But Zhang also pointed out that issues remain, such as shrinking demand and difficulties facing small and medium-sized enterprises (SMEs), citing sub-indexes related to orders and SMEs that remained in contraction this month.

Zhang called for further efforts to lift constraints on demand and improve the macroeconomic environment for enterprises, especially smaller firms.

Friday's data also showed that the PMI for China's non-manufacturing sector came in at 52.7 in December, up from 52.3 in November.

The services sector witnessed a faster recovery. In December, the sub-index for business activities in the services sector reached 52, up 0.9 percentage points from that in November.

The construction industry expanded at a slower pace due to the cold weather and upcoming holidays, with the sub-index for business activities in the construction sector standing at 56.3 in December, 2.8 percentage points lower from the previous month.

The government policies to ensure supplies and stabilize prices have relieved certain cost pressures for construction companies, Zhao noted. The sub-index tracking input prices of the construction sector has remained in contraction for two straight months.