BEIJING, Dec 31, 2025 (BSS/AFP) - China's factory activity ticked up slightly in December, official data showed Wednesday, an unexpected silver lining to cap an otherwise lacklustre end to the year for the world's second-largest economy.

A key measure of industrial health, the manufacturing purchasing managers' index came in at 50.1 this month, according to the National Bureau of Statistics (NBS).

That sits just above the 50-point mark separating contractions from expansions.

The figure had not been positive since March.

December's reading was significantly higher than a Bloomberg forecast based on a survey of economists, which had predicted the figure to hold steady at 49.2.

Additionally, the non-manufacturing PMI rose to 50.2 in December, NBS data showed, returning to positive territory after an unexpected dip to 49.5 the previous month.

NBS statistician Huo Lihui hailed "an overall improvement in the country's economic activity", according to a statement offering official interpretations of the data.

The indicators are encouraging signs for policymakers in Beijing battling persistent headwinds in the domestic economy.

Entrenched consumer caution fuelled by a years-long debt crisis in the property sector has weighed on China's growth outlook, spurring calls for leaders to step up support measures.

In a stark indication of China's consumer woes, retail sales grew in November at their slowest pace in nearly three years, official data showed this month.

Reversing the decline has become a top priority for leaders and was a key theme at a closely watched political meeting in Beijing this month focused on economic planning.

Authorities announced Tuesday that 62.5 billion yuan ($8.9 billion) in new funds would be directed towards an existing consumer goods trade-in scheme in the new year.

The subsidies designed to encourage spending will apply to certain big-ticket items including refrigerators, televisions, washing machines, automobiles and computers.

Wednesday's PMI expansions "point to a partial reversal of the recent weakness in investment spending and construction activity", wrote Julian Evans-Pritchard of Capital Economics in a note following the data release.

Momentum in the country's service sector "remains weak", while growth in manufacturing is heavily dependent on exports, he warned.

"The big picture is that the structural headwinds from the property downturn and industrial overcapacity are set to persist in 2026," he added.