China official manufacturing PMI drops to 50.5 in January

Nathan Andrada – Fourth Estate Cooperative Contributor

Beijing, China (4E) – The China manufacturing purchasing managers’ index (PMI) fell to its lowest level in five months in January, according to a government report released on Saturday.

The National Bureau of Statistics and China Federation of Logistics and Purchasing reported in Beijing that the PMI was at 50.5. The figure is in line with analysts’ median estimate of 50.5 from a reading of 51 in December, according to data compiled by Bloomberg News.

A reading above 50 indicates expansion, while below that signals contraction.

Last month, the sub-index for production was at 53 percent, lower by 0.9 percentage points from December. The new orders sub-index fell 1.1 percentage points to 50.9 percent, according to the report.

In a separate survey released earlier this week, the HSBC Holdings Plc and Markit Economics manufacturing PMI indicated the first contraction in six months, a signal of a slowdown in the world’s second-largest economy. The central government are facing risks of a $6tn shadow-banking industry and high provincial government debt.

The lower PMI in January was attributed to the approach of the Chinese New Year holiday, according to the statistics bureau, but expects an improvement in China’s operating environment for production this year.

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