China’s Manufacturing Activity Expands for the Second Consecutive Month Amid Policy Stimulus

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China manufacturing activity expanded for the second consecutive month in November, driven by policy stimulus and holiday sales, according to data released by the National Bureau of Statistics on November 30.

The Manufacturing PMI reached 50.3 in November, marking a 0.2 percentage point increase from the previous month and slightly surpassing the market expectation of 50.1. Among the sub-indices, the production index continued to expand, rising by 0.4 percentage points to 52.4, while the new orders index improved from 50.0 in October to 50.8.

At the same time, the supplier delivery time index rose from the contraction of 49.8 to the expansion territory at 50.2, reflecting a short-term recovery in demand driven by policies such as the “trade-in” initiatives and the Double 11 shopping festival promotions.

In other indices, the new export orders index increased by 0.8 percentage points to 48.1, likely supported by the “front-loading” effect associated with U.S. presidential candidate Trump’s election. Business expectations for manufacturing continued to improve, with the business outlook index climbing by 0.7 percentage points to 54.7.

 

In the non-manufacturing sector, the November Non-Manufacturing PMI registered at 50.0, a 0.2 percentage point decline from the previous month. Key sub-indices such as new orders, input prices, and employment all experienced declines and remained in contraction territory, reflecting weaker demand in sectors such as retail, accommodation, and dining after the National Day holiday.

 

Breaking down by industry, the construction business activity index fell by 0.7 percentage points to 49.7, reflecting the seasonal downturn in winter construction activities. Meanwhile, the service sector remained unchanged at 50.1.

Overall, after three months of combined monetary and fiscal policy stimulus, signs of a preliminary economic recovery have begun to emerge in China. However, according to a Bloomberg report, the expansion in manufacturing and service activities may be more indicative of seasonal recovery rather than substantial economic growth. Thus, the effectiveness and sustainability of policy measures should be closely monitored.