Chinese manufacturing shrinks for third straight month

By: News Team

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Chinese manufacturing shrinks for third straight month

China’s manufacturing industry continued to contract in December, a month in which the country was shaken by a wave of infections after withdrawing the strictest measures of its ‘zero covid’ policy, according to official data published today by the National Bureau of Statistics (ONE).

The purchasing manager index (PMI), the benchmark indicator of the manufacturing sector, deepened its fall from 48 points in November to 47 in the last month of the year.

In this indicator, a mark above the threshold of 50 units implies growth and below, contraction.

The decline exceeded the forecast by analysts, among whom the most widespread forecast was about 48 points.

Thus, the index registered a fall in eight of the twelve months of 2022, a year marked by the harsh containment measures against covid and its subsequent withdrawal in December.

ONE statistician Zhao Qinghe explained that the pandemic has had “a great impact” on the production and demand of companies in December and assured that 56.3% of the companies surveyed declared having been “very affected” by the wave of infections.

The five sub-indices into which the indicator is divided fell into contraction territory, with the raw materials experiencing the best evolution and the delivery time for suppliers, the most negative.


The ONE also published today the PMI of the non-manufacturing sector, which measures activity in sectors such as construction or services and continued to contract, from 46.7 reached in November to 41.6 in December.

The sub-index that measures activity in construction denoted expansion, although it fell by one point compared to the eleventh month of the year to 54.4 units.

The services sector fell to 39.4 integers, a figure that represents a decrease of 5.7 points.

Among the 21 service sector industries examined by the statistical institution, 15 contracted in December, with some of them such as catering, accommodation or road transport falling below 35 points.

The composite PMI published by the ONE, which combines the evolution of the manufacturing and non-manufacturing sectors, fell 4.5 points to 42.6, which, according to Zhao, indicates that “the general production and operation activities of Chinese companies have slowed down”

The Chinese government said earlier this month that the “conditions” were in place for the country to adjust its protocols in the face of a “new situation” in which the virus causes fewer deaths.

The changes came after the weariness of the restrictions crystallized into protests in various parts of the country after the death of ten people in an apparently confined building in Urumqi (northwest), with slogans such as “I do not want PCR, I want to eat” or “give me back my freedom”.

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