10th January 2024: 2023 Manufacturing and Services PMI

This episode contains segments on China’s official manufacturing and services activity in December; on the country’s actual use of foreign direct investment in January-November and on profits at larger industrial firms in China in the first eleven months of 2023. From the Chamber’s side: join us on 16th January online or in person in Beijing to hear economists and industry experts forecasts for the year ahead, and find out what potential risks and opportunities they think businesses and investors should be aware of in the evolving economic landscape of China.


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Read more:

China official PMI, December


Caixin China PMI, December



China actual use of FDI, January-November


China industrial profits, January-November


Chamber event: China Economic Outlook 2024



XINHE: Hello and welcome to China Shortcuts,

MARIANN: the European Chamber’s weekly catchup on China’s business landscape.


XINHE: Manufacturing activity in China dipped to a six-month low in December, while services activity increased slightly from November due to an uptick in construction.

MARIANN: The official manufacturing purchasing managers’ index or PMI fell to 49 points in November, remaining under the 50-point benchmark separating growth from contraction for the third month in a row. While production continued to expand, new orders fell at a steeper rate than in the previous two months, with export demand sinking to the lowest level recorded in 2023.

Meanwhile, the non-manufacturing PMI rose to 50.4 points in December, pushed by stronger construction activity. Activity in the service sector itself, however, continued to decline as demand stayed relatively weak.


XINHE: Caixin’s manufacturing and services PMI data, which are based on two private surveys indicated a slightly different picture, with manufacturing activity shown to be picking up for the second month in a row, and services activity expanding at a faster pace too in December.

MARIANN: The Caixin China General Manufacturing PMI suggested that the fall in new export business was softening and cost pressures continued to moderate at the end of 2023. However, the survey found that business confidence among manufacturing companies remained subdued, even though respondents expected that a rise in global demand would push production to increase in the year ahead.

Caixin’s services PMI showed services activity to expand at the quickest pace for five months in December due to a surge in new orders. Services companies increased their staffing levels as a result, and were generally optimistic about the upcoming 12 months, with the expectation that improving economic conditions will lead to a rise in client spending.


XINHE: China’s actual use of foreign direct investment or FDI fell 10 per cent year-on-year in the first eleven months of 2023.

MARIANN: According to data released by China’s Ministry of Commerce on 21st December, while the utilisation of FDI shrank, the number of new foreign-invested companies rose 36 per cent compared to the same period last year. The use of FDI in the manufacturing sector fell 2.1 per cent overall, but rose in certain subsectors. For instance, the use of FDI in the medical device manufacturing industry surged over 27 per cent year-on-year. In its statement, the ministry highlighted that the high-tech industries attracted over 37 per cent of the total use of FDI in the January-November period, which was a slight uptick from 2022.


XINHE: Profits at larger industrial firms in China dropped 4.4 per cent year on year in the January-November period.

MARIANN: The drop in profits moderated to the slowest rate recorded all year by the end of November. In the first eleven months of 2023, foreign-invested industrial firms reported the steepest losses to their profits compared to the same period in 2022, while profits at private-owned industrial companies grew slightly year-on-year. A sectoral breakdown showed that firms in mining and manufacturing saw their profits shrink, but utilities providers had their profits rise over 47 per cent during the same period.


XINHE: At the annual Central Economic Work Conference, held  in December, China’s leadership reviewed key work that had taken place in 2023. While noting the country’s economic recovery and the progress made in high-quality development in 2023, some of the challenges China still faces were also highlighted.

MARIANN: These challenges include the lack of effective demand, overcapacity in some sectors, lacklustre social expectations, certain risks and hidden problems, bottlenecks in the domestic circulation, as well as rising complexity, severity, and uncertainty of the external environment.

XINHE: Join us on 16th January online or in person in Beijing to hear economists’ and industry experts’ forecasts for the year ahead, and find out what potential risks and opportunities they think businesses and investors should be aware of in China’s evolving economic landscape.


MARIANN: Thanks for listening. Tune in again next week.

XINHE: In the meantime, please find useful links in the episode notes.

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