China’s factory activity contracted for a fourth straight month in January, adding to signs of continued weakness within the world’s second-largest economy.
The official manufacturing purchasing managers index was 49.2 this month, the National Bureau of Statistics said in a statement on Wednesday — slightly above December’s reading of 49 but still below the 50 mark that separates expansion from contraction. Economists had expected 49.3.
A gauge of non-manufacturing activity — measuring the construction and services sectors — was 50.7, better than December’s 50.4 and roughly in line with expectations among economists.
The world’s second-largest economy has been trying to regain momentum this year after the government introduced some stimulus. That’s included measures to unleash more long-term cash for banks, tighten rules on the lending of shares for short selling and broaden developer access to loans.
Economists expect Beijing to announce a fairly ambitious growth goal for 2024 when the national legislature meets in March. The economy hit an official government growth goal of around 5% last year, but maintaining a similar rate of expansion in 2024 may be challenging.
The base of comparison will be higher, and the economy no longer has the benefit of a boost from the release of pent-up demand immediately post-pandemic. Main drags on growth also remain, with the real estate slump showing no signs of ending and price drops continuing. Trade tensions with major partners are intensifying over key exports including electric cars, adding to the downside risks facing the economy.
