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UH-OH: Chinese Manufacturing Unexpectedly Contracts

Sam RoJan 23, 2014, 07:21 IST

HSBC

China's HSBC Flash Manufacturing PMI fell to a six-month low of 49.6 in January. This compares to a 50.5 in December.

Any reading below 50 signals contraction.

"The marginal contraction of January's headline HSBC Flash China Manufacturing PMI was mainly dragged by cooling domestic demand conditions," said HSBC's Hongbin Qu. "This implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth. As inflation is not a concern, the policy focus should tilt towards supporting growth to avoid repeating growth deceleration seen in 1H 2013."