Investy.com- China’s manufacturing activity unexpectedly contracted in January, purchasing managers’ index data showed, as local firms took only a passing boost from recent stimulus measures from Beijing.
Growth in non-manufacturing activity also slowed sharply in January, as the outlook for local firms was clouded by the prospect of increased US trade tariffs.
fell to 49.1 in January, compared to expectations that it would hold steady at 50.1 seen in December. A reading below 50 indicates contraction in the sector, with the manufacturing PMI now falling into contraction after three months of growth.
It slipped to 50.2, much lower than December’s reading of 52.2. That brought China to 50.1, much lower than expectations of 52.1 and December’s reading of 52.2.
PMI data on Monday indicated that Chinese companies received limited support from some of the aggressive stimulus measures Beijing has launched until the end of 2024, highlighting the need for more support from the government.
The data comes just before the Lunar New Year holiday, when Chinese markets will be closed for a week. Holidays tend to increase local business activity, especially in the non-manufacturing sector, amid increased travel and spending.
Monday’s data also comes amid heightened concerns about increased U.S. trade tariffs against China. US President Donald Trump has warned that he may impose a 10% tariff on all Chinese imports by February 1.
China is expected to further support measures to offset the impact of Trump’s planned tariffs.
