Analysts criticize China's insufficient stimulus as December factory activity growth falls short of expectations.

• The National Bureau of Statistics released data showing that the country's official purchasing managers' index for December was 50.1.
• In November, manufacturing activity was 50.3, which fell short of Reuters' expectations of 50.3. However, in October, manufacturing activity was 50.1, which met Reuters' expectations.

Beijing's stimulus measures were not enough to significantly revive China's struggling economy, as indicated by the missed growth in factory activity in December, according to analysts.

The National Bureau of Statistics released data showing that the country's official purchasing managers' index for December was 50.1.

In November, manufacturing activity came in at 50.3, which was below the expected 50.3 reading from Reuters. A PMI reading above 50 indicates expansion in activity, while a figure below that points to contraction.

The National Bureau of Statistics reported that production and new orders for sectors such as agricultural and sideline food processing, general equipment, and food and beverages increased.

In December, China's non-manufacturing PMI, which gauges activity in services and construction, increased from 50.0 to 52.2.

Among the 21 industries examined, 17 experienced an increase in activity compared to the previous month, including aviation, transportation, and telecommunications. Additionally, the construction industry saw growth due to the upcoming Spring Festival holidays.

According to Tommy Xie, head of Asia macro research at OCBC, one reason for the big swing in the non-manufacturing PMI last month could be attributed to the significant decline in construction PMI.

The Caixin/S&P Global manufacturing purchasing manager's index, which will be released on Thursday, will also be monitored by investors.

Macquarie Group's chief China economist, Larry Hu, predicted that the Chinese economy in 2024 will be characterized by uncertainty and navigating through challenges.

"Although policy stimulus has helped hit the GDP target, deflationary pressures remain, and it's not enough to reflate the economy," he stated.

The Chinese economy has exhibited signs of revival after the implementation of stimulus measures in late September.

Xie stated that China's recovery is still ongoing, with a projected growth rate of around 5% for this year, possibly reaching 4.9%. He added that this represents a small piece of recovery for 2024.

The World Bank has revised its forecast for China's economic growth in 2024 and 2025, reflecting recent policy adjustments. The bank now anticipates that China's GDP will grow 4.9% in 2024, up from its previous projection of 4.8%, and 4.7% in 2025.

Despite recent economic data from China showing that the world's second-largest economy is still experiencing disinflation, tepid consumer demand and a prolonged downturn in the property market continue to be major factors.

In November, China's consumer inflation reached its lowest point in five months, while its export and import figures did not meet expectations. Furthermore, the latest retail sales data did not meet Reuters' forecasts.

In November, China's industrial profits suffered a 7.3% decline from the previous year, marking the fourth consecutive month of decreases.

China's finance ministry declared that it would enhance fiscal support next year to stimulate consumption by increasing consumer goods trade-ins, raising pensions, and providing medical insurance subsidies for residents.

The Chinese government plans to issue 3 trillion yuan ($411 billion) in special treasury bonds next year, which is the largest amount ever, in an effort to increase fiscal stimulus, reports Reuters.

The European Union's increased trade barriers and Trump's threat to impose higher tariffs on Chinese goods will pose greater challenges to China's export sector.