China's factory activity contracted for the 10th straight month in December, and at a sharper pace than in November, a private survey showed, dampening hopes that the world's second-largest economy will enter 2016 on steadier footing.
December factory activity shrinks for 10th month
Some market watchers suspect real growth is actually much lower than official data suggest.
China's President Xi Jinping speaks during a Forum on China-Africa Cooperation in Sandton, Johannesburg, December 4, 2015. REUTERS/Siphiwe Sibeko
The Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) slipped to 48.2 in December, below market expectations for a slight pick-up to 49.0 and down from November's 48.6.
The reading was the lowest since September, remaining well below the 50-point level which demarcates contraction from expansion on a monthly basis.
The survey focuses more on small and medium-sized private firms. An official survey on Friday, which looks at larger state-owned companies, showed a fifth month of contraction though at a slightly more modest pace of 49.7.
ADVERTISEMENT
Both surveys pointed to a continued albeit gradual loss of momentum, not a sharper deterioration or "hard landing" which has been feared by global investors. Plus, a stronger services sector is cushioning some of the downdraft from factories.
Still, economists expect more interest rate cuts, reductions in banks' reserve requirements and other stimulus in 2016 as the economy has been unusually slow to respond to a year-long flurry of support measures, suggesting it is facing deeper-rooted cyclical and structural challenges than in the past.
The government is expected to increase its budget deficit to about 3 percent of gross domestic product in 2016 to help boost activity.
Weighed down by weak demand at home and abroad, factory overcapacity and cooling investment, China is expected to post its weakest economic growth in 25 years in 2015, with growth seen cooling to around 7 percent from 7.3 percent in 2014.
JOIN OUR PULSE COMMUNITY!
ADVERTISEMENT
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
Recommended articles
Another Boeing whistleblower is dead 2 months after the last one
Yahaya Bello: Pressure mounts on EFCC as ex-AGF faults ₦80bn fraud case
PHOTOS: Police arrest, parade masterminds of Abuja-Kaduna train attack
CSOs demand freedom in operation for anti-graft agencies
Anti-graft agency arrests 3 Kano govt officials aiding foreigners secure citizenship
ONSA directs security agencies to enforce Nigeria’s cybercrime law fully
ASUU faction dissociates self from UniAbuja strike, says cabal behind action
Nigeria’s economy to experience significant growth soon – Shettima
Businesses grounded in Maiduguri fish market as traders revolt against leaders
ADVERTISEMENT
