China’s manufacturing activity dropped sharply for the third month in a row in December, according to official data released on Saturday. This happened even though Beijing loosened restrictions on COVID at the beginning of the month.
According to data from the National Bureau of Statistics, the Purchasing Managers’ Index (PMI), which is a key measure of manufacturing in the world’s second-largest economy, came in at 47 points. This is down from 48 points in November and well below the 50-point mark that separates growth from contraction.
China had insisted for more than two years on a “zero-COVID” strategy to stop outbreaks by using strict quarantines, lockdowns, and mass testing. This was a hard-line approach that sent shockwaves through the world economy.
Beijing suddenly eased pandemic restrictions on December 7, but the country is still struggling to get back on its feet because of a rise in COVID cases.
“Because of the effects of the epidemic and other things, China’s economy has generally gotten worse in December,” said Zhao Qinghe, a senior statistician at the NBS.
“The epidemic has had a big effect on how much businesses make and how much people want to buy, as well as on staffing, logistics, and distribution.”
Since September, the index hasn’t been in the positive zone, and December’s number was less than the 47.8 that Bloomberg analysts had predicted.
Zhao’s statement, on the other hand, was full of hope.
“The market trend should pick up as the situation with the epidemic gets better,” he wrote.
China’s strategy to get to “zero-COVID” was based on a lot of testing, strict monitoring of movement, and quarantining people who tested positive.
These measures caused plants to close without warning, which messed up supply chains and forced some companies to shut down for good.
The non-manufacturing PMI, which includes the service and construction industries, also went down this month, from 46.7 points in November to 41.6 points this month.
After reaching its goal of over 8% growth in 2021, the government has set a growth goal of about 5.5% for this year.
But many economists now think that the goal of 2022 is not possible.
China’s gross domestic product (GDP) for the year will be released in January.
