Chinese manufacturing looking weak

China’s manufacturing sector dropped to its weakest level in three years in January, according to a key index.

As AAP reports, China’s official purchasing managers index (PMI) for January fell to 49.4 from the December reading of 49.7. (Readings above 50 represent expansion in the sector, while readings under 50 represent contraction).

The result was reinforced by the separate Caixin/Markit PMI for January which came in at 48.4 (compared to 48.2 in December).

Commenting on the result, Dr. He Fan, Chief Economist at Caixin Insight Group said: “Recent macroeconomic indicators show the economy is still in the process of bottoming out and efforts to trim excess capacity are just starting to show results.

“The pressure on economic growth remains intense in light of continued global volatility. The government needs to watch economic trends closely and proactively make fine adjustments to prevent a hard landing.

“It also needs to push ahead with existing reform measures to strengthen market confidence and to signal its intentions clearly.”

Image: Reuters

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