China manufacturing conditions deteriorate for first time in six months

HONG KONG – HSBC’s Flash China Manufacturing Index has come in  at 49.6 in January, a six-month low and down from 50.5 in December. The Flash China Manufacturing Output Index at 51.3 in January (51.4 in December) was at a three-month low.
Manufacturing output increased, but at a slower rate, while new orders, new export orders, employment, and both output and input prices all fell.

 Hongbin Qu, HSBC’s Chief Economist, China, and& Co- Head of Asian Economic Research, commented that the marginal contraction inf January’s headline Flash PMI was mainly dragged by cooling domestic demand conditions. “This implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth,” he said.

“As inflation is not a concern, the policy focus should tilt towards supporting growth to avoid repeating growth deceleration seen in the first half of 2013.” www.hsbc.com (ATI).