China manufacturing contracts for 10th straight month

BEIJING - China’s manufacturing activity continued to deteriorate for a 10th month in a row in December, according to the Caixin China Purchasing Managers’ Index, came in at 48.2. November’s reading was 48.6. Data showed that the PMI fell largely due to renewed shrinking of manufacturing output, with total new business weakening further in the wake of softening demand, both domestically and internationally.

For the first time in three months, new export orders began to fall. With increasing downward pressure on the economy, manufacturers continued to shed workers and cut purchasing activities as input costs and sales prices both fell.

Chief Economist He Fan of Caixin Insight Group said that this PMI shows “the forces driving an economic recovery have encountered obstacles and the economy is facing a greater risk of weakening…More fluctuations in global markets are expected now that the US Federal Reserve has started raising interest rates”.

He said China’s government “needs to pay more attention to external risk factors in the short term and fine-tune macroeconomic policies accordingly so the economy does not fall off a cliff”. Specifically, He recommended the promotion of supply-side reform to “release its potential and reap the benefits”.  www.webershandwick.cn (ATI).