<div><span style="font-size: 1rem;">China's manufacturing activity contracted sharply in December for the third month in a row, according to official figures released Saturday, despite Beijing's loosening of Covid restrictions at the beginning of the month.</span><br></div><div><br></div><div>The Purchasing Managers' Index (PMI) -- a key gauge of manufacturing in the world's second-biggest economy -- came in at 47 points, down from November's 48 and well below the 50-point mark separating growth from contraction, according to data from the National Bureau of Statistics.</div><div><br></div><div>For more than two years, China had insisted on a zero-Covid strategy of stamping out outbreaks with strict quarantines, lockdowns and mass testing -- a hardline policy that reverberated across the global economy.</div><div>On December 7, Beijing abruptly loosened pandemic restrictions, but despite that, the country is still struggling to recover due to a surge in Covid cases.</div><div><br></div><div>"In December, due to the impact of the epidemic and other factors... China's economic prosperity has generally declined," NBS senior statistician Zhao Qinghe said in a statement.</div><div><br></div><div>"The epidemic has had a significant impact on business production and demand, staff presence, logistics and distribution."</div><div><br></div><div>The index has not been in positive territory since September, and December's figure was lower than the 47.8 reading predicted by Bloomberg analysts.</div><div><br></div><div>Zhao, however, struck a note of optimism in his statement.</div><div><br></div><div>"As the epidemic situation gradually improves, the market trend is expected to pick up later," he wrote.</div><div><br></div><div>China's zero-Covid strategy was based on widespread testing, strict monitoring of movement, and quarantine for those testing positive.</div><div><br></div><div>Those measures, which led to unannounced plant closures, disrupted supply chains and forced some companies to close permanently.</div><div><br></div><div>For its part, the non-manufacturing PMI -- which includes the services and construction sectors -- also contracted further this month, to 41.6 points from 46.7 in November.</div><div><br></div><div>The government has set a growth target of about 5.5 percent this year, after reaching its goal of over 8 percent in 2021.</div><div><br></div><div>But many economists now consider the 2022 target unrealistic.</div><div><br></div><div>China will unveil its gross domestic product (GDP) performance for the year in January. - AFP&nbsp;</div><div><br></div><div>bnbd24/fas</div>