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China’s manufacturing activity expanded in December due to increased export demand, although it was hampered by higher labor and transport costs.
While the country's official manufacturing Purchasing Manager’s Index (PMI) dipped to 51.9 in December from 52.1 in November, it remained above the 50-point mark that separates growth from contraction.
China’s economy is expected to expand around 2% for the full year - the weakest pace in over three decades but much stronger than other major economies still struggling to contain infections.
Tougher coronavirus control measures of its key trading partners in the west and recent domestic infections could diminish industrial demand.
Zhao Qinghe, an official at the National Bureau of Statistics (NBS), noted small businesses were pressured by higher raw material, labor, and distribution costs.
He added that small manufacturers are also struggling to hire workers due to the competition posed by the country's service sector.
