China's factory activity unexpectedly expanded in December, rising to 50.1 and ending an eight-month contraction. This marks a surprise recovery, exceeding forecasts. However, broader economic data indicates a fragile backdrop, with slowing consumer spending, weaker industrial output, and a deteriorating property sector. Policymakers appear hesitant to introduce new stimulus, potentially deferring action until early next year, with a focus on growth quality over pace.