China’s factory activity rose unexpectedly in December 2025, ending an eight-month slump, with the manufacturing Purchasing Managers' Index (PMI) at 50.1 and non-manufacturing activity also expanding. SMU Associate Professor of Finance Fu Fangjian said that the PMI is a leading indicator, and improvements should gradually transmit through to consumption and investment, signalling that aggressive stimulus is not needed for now. He also expects Beijing’s 2026 support to be more targeted, focusing on areas such as high-tech and new productivity, with smaller-scale stimulus than in early 2025
