China’s December PMIs: Stabilization, Not Take‑Off

December 2025 PMIs of China point to a slight yet significant stabilization of activity. While the non‑manufacturing PMI increased to 52.2, clearly in expansion and its highest level since about April, the official manufacturing PMI edged back into expansion at 50.1, its first reading over 50 since March. Given the improvement of both industries, the NBS composite/general PMI probably rebounded to about or slightly over 50, hence undoing November's little contraction.

The manufacturing rebound is still weak below the headlines. A reading just above 50 implies that output and new orders have stopped shrinking but are only slightly rising. Official comments point to feeble domestic demand, intense pricing rivalry and prudent export sentiment, indicating that even if the worst of the negative momentum has slowed, the basic demand picture is still soft.

In building and services, the narrative is little brighter. Driven by significant increases in air transport, telecoms, finance and insurance—many of which are above 60—the services subindex surged to approximately 52, while construction recovered to 53.2 from November's drop. Business expectations in both construction and services are in the high-50s, therefore indicating growing confidence. This setup argues for sustained but deliberate help for policymakers: Low‑50s readings and weak demand advocate for continuous focused financial and credit easing instead of any tilt toward tightening, hence the data reduce immediate hard‑landing concerns.