China Manufacturing PMI Expands to 50.1 in December 2025: First Growth Since March, Beats Forecasts

China's Manufacturing Sector Returns to Growth: Official PMI Hits 50.1 in December 2025In a welcome end-of-year boost for the world's second-largest economy, China's manufacturing activity expanded in December 2025 for the first time since March, according to official data released on December 31, 2025. The official manufacturing Purchasing Managers' Index (PMI) climbed to 50.1, up from 49.2 in November and beating economists' forecasts of 49.2 (Reuters poll).A PMI reading above 50 indicates expansion in factory activity, while below 50 signals contraction. This surprise uptick ends months of subdued performance and offers optimism as China heads into 2026.Key Highlights from the December 2025 PMI DataThe National Bureau of Statistics (NBS) reported strong sub-index improvements:Production index surged to 51.7, up 1.7 points month-on-month. New orders rose significantly, reflecting expanding demand. High-tech manufacturing PMI jumped to 52.5, up 2.4 points, highlighting growth in advanced sectors. Large enterprises led the recovery, with their PMI at 50.8 (up 1.5 points). Broader economic indicators also improved:Non-manufacturing PMI (services and construction) rose to 50.2 from 49.5. Composite PMI output index reached 50.7, up 1.0 point. NBS chief statistician Huo Lihui noted "significant expansion" in production and demand, driven by policy expectations and domestic strength.Private-sector data aligned, with the RatingDog Manufacturing PMI (S&P Global) at 50.1 (from 49.9, beating expectations of 49.8), driven by domestic demand rather than exports.For detailed reports, see CNBC cnbc.com and CGTN news.cgtn.com .What Drove China's Manufacturing Rebound?The expansion comes amid ongoing policy support, including recent stimulus measures to boost domestic consumption and investment. Key factors include:Stronger new orders and production. Growth in consumer goods and equipment manufacturing (both at 50.4 PMI). Rising business expectations index to 55.5. Despite challenges like property sector weakness and softer exports, high-tech and innovative sectors provided momentum.Market Reactions and Global ImplicationsThe better-than-expected PMI data lifted sentiment in Asian markets on December 31, 2025, supporting commodity prices (e.g., iron ore) and the Australian dollar, given China's role as a major importer.Analysts view this as a sign of stabilization, potentially reinforcing expectations for more proactive fiscal and monetary policies in 2026 to sustain growth around the 5% target.Outlook for China's Economy in 2026While cautious optimism prevails, experts note the expansion is modest. Sustained recovery will depend on:Effective implementation of stimulus. Boosting domestic demand. Navigating external pressures like trade tensions. The December PMI suggests policies are taking effect, providing a positive foundation for 2026.This China manufacturing PMI expansion December 2025 underscores resilience in the industrial sector, offering hope amid broader economic headwinds.