Chinese Manufacturing Shrinks in December

China’s manufacturing activity shrank for the first time in seven months in December, a private survey showed on Wednesday.

The final HSBC/Markit Purchasing Managers’ Index (PMI) was at 49.6, just below the 50 level that separates growth from contraction in the sector.

The reading was slightly higher than an initial “flash” number of 49.5 released earlier this month.

But, the result was still down from a final reading of 50 in November.

The most recent data paints an even weaker picture of the slowing Chinese economy, which has been heralded as the “factory of the world”.

New factory orders contracted for the first time since April.

The economic data also backs the series of surprising moves by its government to boost growth in the past two months.

In November, the country’s central bank unexpectedly cut interest rates to 2.75% for first time since 2012 in an attempt to revive the economy.

Whether the world’s second biggest economy will be able to reach its growth target of 7.5% after not missing the mark for 15 years has economists questioning if more needs to be done by policymakers.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza