China’s factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years as Covid infections swept through production lines across the country after Beijing’s abrupt reversal of anti-virus measures.

Chinese manufacturing contracted for a third consecutive month in December, in the biggest drop since early 2020, as the country battles a nationwide COVID-19 surge after suddenly easing anti-epidemic measures.

The official manufacturing purchasing managers index fell to 47 this month from November’s 48, the National Bureau of Statistics said Saturday. That was worse than an estimate of 47.8 in a Bloomberg survey of economists.

The December data reflects the month when the world’s second-largest economy finally ditched its long-held Covid Zero policy in an abrupt reversal.

“Manufacturing and consumption both declined as Covid situation brought relatively big impact to enterprises, personnel on duty and logistics,” the statistics bureau said in a statement accompanying the data release.

China’s economy was faltering before the pivot from Covid Zero as curbs to prevent the spread of infection depressed economic activity and kept the country isolated from the rest of the world.

A persistent property market slump, sluggish consumer demand, and waning overseas appetite for Chinese goods contributed to the downturn, and the gross domestic product is likely to expand just 3 per cent in 2022.

Economists see an increasing possibility for a faster and stronger rebound later in 2023. After the likely slow start in the January-to-March period, growth is projected to pick up to 4.8 per cent for the year