BEIJING, Jan 2 (Reuters) - China's factory activity showed growth in December, but at a slower-than-expected pace as sales were negatively impacted by declining export orders. This trend was highlighted by both a private-sector survey and an official report earlier this week, prompting renewed calls for economic stimulus as the approaching U.S. administration under Donald Trump raises trade tension concerns. The Caixin/S&P Global manufacturing PMI edged down to 50.5 in December, slightly missing analysts' predictions of 51.7, and down from 51.5 in the previous month.

The rate of output expansion fell to a three-month low, significantly influenced by a slowdown in new orders. Notably, new export orders reverted to a contracting phase for the fourth time in the last five months, amid broad concerns about the global economic landscape and potential new U.S. tariffs, which pose considerable risks for China, the world's leading exporter.

Prior to the anticipated tariffs, some Chinese exporters and their U.S. counterparts had expedited shipments, but a report from the China Beige Book indicated that this trend might be waning, stating, "The pulling forward of trade before anticipated tariffs has ended." The report highlights that the only economic salvation might depend on whether Trump's tariff discussions are merely rhetoric.

Following a series of policy support measures from Beijing last year, certain sectors experienced some stabilization in economic activities. Observers are now closely watching for further initiatives from policymakers aimed at reviving domestic demand. Chinese manufacturers are remaining cautiously optimistic regarding their output in 2025, although this optimism has decreased to its lowest level since September, mainly due to skepticism surrounding growth and trade dynamics.

In December, the growth in purchase stocks slowed, and there was an accumulation of post-production inventory—signs pointing to a less vibrant manufacturing sector. Furthermore, staffing levels continued to decline for the fourth consecutive month; however, the rate of job reductions was less severe than in November.

Average selling prices saw their first decrease since September, contrasting with ongoing increases in input costs, indicating that firms had to absorb rising expenses while lowering selling prices to maintain competitiveness. Economist Wang Zhe from Caixin Insight Group remarked on the complexities facing the external environment this year, advocating that early policy preparations are essential. Policymakers aim to enhance household income and promote consumption to bolster economic growth in 2025, including plans for pension increases and a consumer goods trade-in scheme, as stated in additional reports by the South China Morning Post.