Growth Concerns Linger as China HSBC PMI Contracts to 49.5

Chinese factory output fell for a second straight month in December, boosting expectations that more stimulus measures will be needed to avoid a sharper slowdown amid slowing activity in the world’s second-largest economy.

The flash HSBC/Markit China manufacturing purchasing managers’ index (PMI) slipped to 49.5 from a final reading of 50 in November, contracting for the first time in seven months. The 50-point level separates growth from contraction.

“This means that China is leaving this year on a very weak note,” Frederic Neumann, MD & co-head of Asian economics at HSBC, told CNBC. “We see a contraction in the manufacturing sector. Even new orders – a forward-looking indicator – points to further weakness ahead. I think they need to ease more just to right the ship again.”

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.