Manufacturing slowed in China this month for the first time in four months as workers began leaving assembly lines to travel to their hometowns for the Lunar New Year holiday.
The Chinese National Bureau of Statistics said its purchasing managers index (PMI), based on a survey of factory managers, slipped to 49.1 this month from 50.1 the month before.
A PMI reading above 50 indicates expansion, while under 50 signals a contraction in activity.
Photo: AFP
New orders and production also contracted.
A parallel PMI for the non-manufacturing sector, which covers construction and services, fell to 50.2 from 52.2 last month.
The slide in factory activity was partly due to the approach of the holiday, bureau senior statistician Zhao Qinghe (趙清河) said.
The Lunar New Year holiday, China’s most important festival, begins today and runs until Tuesday next week.
Millions of Chinese leave the cities to travel back home for a rare break with family during the holidays, which tend to distort economic data early in the year.
China’s economy grew at a 5 percent annual pace last year, hitting the government’s target thanks to strong exports and stimulus measures.
While activity slowed this month, it is likely to pick up again thanks to the government’s efforts, Capital Economics Ltd economist Huang Zichun (黃子春) said in a commentary.
However, “the disappointing PMI data underscores the difficulty policymakers face in achieving a sustained recovery in growth,” she said.
She noted that the PMI for construction also fell.
“This is disappointing, and suggests that fiscal support may be struggling to offset the broader pressures weighing on construction activity,” Huang said.
The outlook for exports also remains uncertain, given threats by US President Donald Trump to raise tariffs on imports from China.
Separately, China announced new measures to promote the development of index investment products, its latest effort to shore up the ailing equity market as it embraces a turbulent external economic environment.
The government aims to achieve a significant increase in the scale and proportion of index investment in the capital market through efforts over a period of time, the China Securities Regulatory Commission said in a statement posted on its Web site on Sunday.
The commission would also try to attract foreign funds to invest in the yuan-denominated A-share market via exchange-traded funds (ETFs) and promote the development of equity and bond ETFs, it said.
It would also try to reduce index funds’ costs and exempt market-making fees, it added.
Additional reporting by Bloomberg
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The TAIEX ended the Year of the Dragon yesterday up about 30 percent, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). The benchmark index closed up 225.40 points, or 0.97 percent, at 23,525.41 on the last trading session of the Year of the Dragon before the Lunar New Year holiday ushers in the Year of the Snake. During the Year of the Dragon, the TAIEX rose 5,429.34 points, the highest ever, while the 30 percent increase in the year was the second-highest behind only a 30.84 percent gain in the Year of the Rat from Jan. 25, 2020, to Feb.
RSS