Price slump: Workers at a steel tube tower production line at a factory in Jiangsu province. The Caixin manufacturing PMI fell to 50.1 in January, the lowest in four months. — AFP
HONG KONG: China’s manufacturing activity unexpectedly declined for a second straight month in January, underlining the need for Beijing to step up economic stimulus with Donald Trump slapping tariffs on the country’s exports.
The Caixin manufacturing purchasing managers index (PMI) fell to 50.1, the lowest in four months, from 50.5 in December, according to a report released by Caixin and S&P Global.
While any reading above 50 indicates an expansion of activity, the figure was well below the median forecast of 50.6 by economists surveyed by Bloomberg.
“The major challenges stemmed from a notable drop in employment, sluggish external demand and weak price levels,” Wang Zhe, senior economist at Caixin Insight Group, said in a statement.
“Rising uncertainty in international policies could worsen China’s export environment, posing significant challenges for the economy.”
The results of the private survey compare with last month’s sharp drop in the official manufacturing PMI, which showed activity contracted more than expected and fell to the weakest since August.
The findings reinforce the urgency for Beijing to stump up more money – especially by way of public borrowing and spending – to plug a hole in demand.
The calculus is increasingly shifting after Trump imposed a 10% levy on Chinese exports, a growth driver for the world’s second-largest economy last year.
Output prices slumped in January at the sharpest pace since July 2023. — Bloomberg
