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A PMI reading below 50 indicates contraction, while that above 50 signals expansion.
January continued December’s decline and marked the lowest factory activity since August 2013, according to a statement jointly released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).
In January, the sub-index for production stood at 53 per cent, down 0.9 percentage points from December, while the sub-index for new orders lost 1.1 percentage points to 50.9 per cent, said the statement.
Major PMI compounds all declined in January, indicating downward pressure on the economy, said Zhang Liqun, an analyst with the Development Research Center of the State Council.
But Zhang also added that the factory activity, despite the decline, was still in expansion, “In general, the country’s economy is still expecting stable growth,” he said.
China saw its economy maintain a 7.7-per cent growth rate in 2013, the same as in 2012, with GDP totaling $9.3 trillion.
In November last year, Chinese President Xi Jinping said he is confident that China will have healthy economic growth and will not fall into a middle-income trap.
“We are currently changing our way of development, adjusting our economic structure, accelerating our new style of industrialization, promoting technology, urbanization and agricultural modernization,” said Xi.
The top Chinese leadership have said they are willing to accept a slower pace of growth, vowing to transform the economy from an investment and exports-led system to a more sustainable consumption-led one.
TBP and Agencies