China’s Factory Activity Hits 3-Month High in January

China’s factory activity strengthened in January, building on late 2025 gains as manufacturers ramped up output ahead of the extended Lunar New Year holiday. The Rating Dog China General Manufacturing PMI rose to 50.3 from 50.1 in December, matching market expectations and marking the strongest reading since October’s 50.6. Production increased as new orders grew both at home and abroad, with total new orders rising for an eighth straight month and export orders rebounding, led by Southeast Asia. Firms also hired additional staff to manage rising workloads and clear backlogs. Despite stronger activity, business confidence slipped to a nine month low. Rising costs weighed on sentiment, with input prices climbing at the fastest pace in four months, mostly due to higher prices of metal. Factory gate prices rose for the first time since November 2024. The reading was better than the official survey, which showed manufacturing contracting at 49.3, as authorities cited seasonal slowdowns linked to the nine-day Lunar New Year holiday.