China manufacturing decreases for first time in over two years

Activity in China’s manufacturing sector decreased for the
first time in 27 months in January, according to a key index.

AS AFP reports, the National Bureau of Statistics’ Purchasing
Managers’ Index (PMI) for January was 49.8, a drop from the December figure of 50.1.

Results above 50 indicate growth in the sector, while figures
under 50 represent contraction.

According to ANZ Group, the result was particularly
unexpected because Chinese New Year falls in late February this year and
manufacturing usually experiences good results before this holiday time.

HSBC/Markit will release its final PMI for January today. Its
Flash PMI for the month was 49.8, compared with 49.6 for December. Compared to
the official PMI from the National Bureau of Statistics, the HSBC/Markit
reading concentrates on smaller manufacturing firms.

Reuters reports that China’s service sector salon experienced
a drop in January, and the nation’s new export orders also fell.

According to the Wall Street Journal, Beijing is likely to
drop its growth target for 2015 to around 7% (from the 2014 figure of around
7.5%).

The government is using tax breaks and infrastructure
projects to attempt to boost the economy. It is prioritising jobs growth and
aims to create 10 million jobs this year.