China factory activity shrinks more than expected

Lower factory activity: An employee hard at work in a textile factory in Xiayi county. The official PMI (PMI) fell to 49.4 in December, below the 50-point level that separates growth from contraction. — AFP

BEIJING: China’s factory activity contracted for the first time in over two years in December, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington and reduce the risk of a sharper economic slowdown in 2019.

The increasing strain on factories signals a continued loss of momentum in China, adding to worries about softening global growth, especially if the Sino-US dispute drags on.