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The
index fell to 48.1 in December from 51.8 in November, showed the
World Economics' survey of sales managers at over 2,300
companies conducted Dec. 1-16. The index was the lowest since
the survey began in 2013.
The survey results were among the first indicators of how
business sentiment has taken a hit in the world's second-biggest
economy, after the sharp relaxation of strict COVID containment
measures on Dec. 7 triggered a still-growing wave of domestic
COVID cases across China.
"The survey suggests strongly that the growth rate of the
Chinese economy has slowed quite dramatically, and may be
heading for recession in 2023," World Economics said.
China's GDP is expected to grow just 3% this year, its worst
performance in nearly half a century.
The survey showed business activity fell sharply in December
with the sales managers indexes in Manufacturing and Service
Sectors both below the 50 level.
"The percentage of companies that claim to be currently
negatively impacted by COVID has risen to a survey high, with
more than half of all respondents now suggesting their
operations are being harmed in one way or another," the
London-based data provider said.
China has recently dismantled some key parts of the world's
toughest anti-COVID curbs and lockdowns. The measures were
championed by President Xi Jinping but impaired the economy and
sparked popular protests unprecedented in his decade-long rule.
The top leaders and policymakers will focus on stabilising the
economy in 2023 and step up policy adjustments to ensure key
targets are hit, according to an agenda-setting meeting ended on
Friday.
"It may take at least another quarter before things turn
around," said Dan Wang, chief economist at Hang Seng Bank China.
"Many small businesses have run out of liquidity, especially
restaurants, gyms, hotels and other city services."
(Reporting by Liangping Gao, Ryan Woo and Joe Cash; Editing by
Stephen Coates and Christian Schmollinger)
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