BEIJING (Reuters)

China’s factory activity grew in December, but at a slower-than-expected pace. According to a private-sector survey released on Thursday, overall sales were dampened by falling export orders amid concerns over the trade outlook.

This data echoed an official survey from Tuesday indicating that manufacturing activity modestly expanded, reinforcing calls for more stimulus to spur growth, especially as Donald Trump is set to take office and likely intensify U.S.-China trade tensions.

The Caixin/S&P Global manufacturing PMI dropped to 50.5 in December from 51.5 the previous month, falling short of analysts’ forecasts in a Reuters poll of 51.7.

The output expansion rate eased to a three-month low, driven by a slowdown in new orders. Notably, new export orders returned to decline, marking the fourth decrease in five months. Subdued external economic conditions and potential new U.S. tariffs pose significant risks for the world’s top exporter of goods.

A report from the China Beige Book noted that while some Chinese exporters and U.S. buyers may have increased shipments in anticipation of Trump tariffs, this surge might be slowing down.

> “The pulling forward of trade before anticipated tariffs has ended. The only rescue in on-year terms is if Trump’s China tariff talk is hot air,” stated the China Beige Book.

Since introducing a series of policy support measures late last year, some Chinese sectors have stabilized in economic activity. The markets are now watching for further policy steps from Beijing, which is focused on reviving domestic demand.

Chinese manufacturers remain optimistic about output growth in 2025, but their optimism has dipped to the lowest level since September. Concerns about growth and trade, particularly due to U.S. tariff threats, impair hopes for new product- and policy-driven sales growth this year.

Additionally, growth in stocks of purchases slowed, and post-production inventory increased in December. Staffing levels declined for the fourth consecutive month, although job losses were less severe than in November.

Average selling prices fell for the first time since September, contrary to another rise in input prices, as respondents reduced their selling prices to support sales. Export charges also dropped.

Wang Zhe, an economist at Caixin Insight Group, commented, “The external environment is expected to be more complex this year, requiring early policy preparation and instant response,” urging official actions to enhance household incomes and improve livelihoods.

Policymakers have committed to raising pensions and expanding a consumer goods trade-in scheme in 2025, vowing to work towards increasing household incomes and “vigorously boost consumption.”