China December manufacturing activity growth eases

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China’s manufacturing sector saw solid growth in December, marking the 18th straight month of expansion, as the world’s second-largest economy continues to show resilient and steady growth.

The country’s official Purchasing Managers’ Index (PMI) stood at 51.6 in December, down from 51.8 in November, according to data released by the National Bureau of Statistics (NBS) on Sunday.

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

A PMI subindex for production dropped slightly in December to 54 from 54.3 in November, and the subindex for total new orders fell in December to 53.4 from 53.6.

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A subindex for input prices rose to 62.2 from 59.8 in November, indicating rising costs for Chinese manufacturers caused by a government crackdown on air pollution and overcapacity cut. Under such circumstances, companies further down the supply chain, face pressure for squeezed margins, though output prices picked up.

As a slowdown started to ripple through, China’s economy performance gradually stabilized, supported by the government infrastructure spending, a steady property market, and strong exports, with China’s strong appetite for raw materials boosting global commodity prices.

The NBS data also showed that growth in China’s services industry picked up in December, showing sound expansion. The service sector accounts for more than half of the country’s GDP.

"Early indicators for December show China's economy pushing into 2018 with steady growth, if unspectacular," said Tom Orlik, Bloomberg chief Asia economist.

"Growth remains remarkably robust, underpinned by resurgent global demand, stimulus-boosted infrastructure spending, and a deleveraging program that remains more honored in the breach than the observance," Orlik said in a research note.