China's December factory activity likely contracted for third month: Reuters poll

China's manufacturing activity likely contracted for the third consecutive month, a Reuters poll showed on Thursday (Dec 28), weighed by soft demand for manufactured goods, a reading that would embolden calls for more policy support.

The official purchasing managers' index (PMI) likely was at 49.5 in December from last month's 49.4, according to the median forecast of 24 economists in a poll conducted Dec 22-28. The 50-point mark separates growth from contraction.

The world's second-biggest economy has staggered following a feeble post-pandemic recovery, held back by a property crisis, local government debt risks and slow global growth. The government has in recent months unveiled a series of measures to prop up growth. Only three of 24 economists expected an expansion of factory activity in December, with the highest forecast reading of 50.5, showed the poll.

New bank lending in China jumped less than expected in November, even as the central bank keeps policy accommodative to lift confidence and spur the recovery.

Ratings agency Moody's in December slapped a downgrade warning on China's credit rating as property pressures mount.

China will strive to expand domestic demand, ensure a speedy economic recovery and promote stable growth, according to an interim report on the country's 14th five-year plan published by parliament on Wednesday.

The official PMI will be released on Sunday. The private Caixin factory survey will be issued on Tuesday, and analysts expect its reading to slowed to 50.4 from an unexpected expansion reading of 50.7 in November.