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China factory activity shrinks for fourth straight month
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Employees work on an assembly line producing wheel loaders at a factory in Qingzhou, in eastern China's Shandong province on Jan. 17, 2024. (AFP/AFP)
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hina's factory activity contracted in January for the fourth consecutive month, official data showed Wednesday, as Beijing struggles to find ways to jumpstart its sluggish economy.
The purchasing managers' index (PMI) -- a key measure of factory output -- came in at 49.2 percent in January, according to China's National Bureau of Statistics.
The figure was a slight improvement from the 49 percent recorded in December, but still below the 50-percent mark separating expansion from contraction.
The last time China saw an expansion in monthly factory activity was in September, when the PMI was 50.2 percent.
January's figure was 0.1 points lower than the 49.3 percent contraction forecast by a Bloomberg poll of analysts.
China's post-Covid recovery has stalled in the face of flagging domestic consumption and declining business confidence.
A prolonged crisis in the property sector -- long a vital growth driver -- is also dampening optimism, as is soaring youth unemployment and a global slowdown that is dragging down demand for Chinese goods.
Policymakers have in recent months announced a series of targeted measures as well as a major issuance of sovereign bonds, aimed at boosting infrastructure spending and spurring consumption.
The results so far have been mixed, with the PMI only rising into positive territory once in the past 10 months.
"Economic momentum remained muted," Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.
"The government is unwilling to boost consumption through fiscal subsidies," he added.
In 2023, the country's gross domestic product expanded 5.2 percent to hit 126 trillion yuan ($17.8 trillion).
The growth was an improvement on the three percent recorded in 2022, but it also marked the weakest performance since 1990, excluding the pandemic years.
