RMB banknotes arranged for photography on July 3, 2018 in Hong Kong, Hong Kong.
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Factory activity in China contracted for the fourth straight month in January, highlighting a flurry of much-needed political support for the world's second-largest economy that Beijing announced last week.
The official manufacturing PMI rose slightly to 49.2 in January from 49 in December Data from the National Bureau of Statistics Released Wednesday. This is in line with the average forecast in a Reuters poll.
The official non-manufacturing managers' index rose to 50.7 in January from 50.4 in December, according to the agency. Strength in the country's services industry helped offset weakness in the construction sector amid a decline in the real estate sector.
A PMI reading above 50 indicates expansion in activity, while a reading below this level indicates contraction.
Among the five sub-indices of the manufacturing PMI, new orders increased marginally, although output jumped by 1.1 percentage points.
Employment declined in both non-manufacturing and manufacturing sectors in December.
The construction industry business activity index, included as part of the non-manufacturing PMI, was 53.9, down 3.0 percentage points.
Zhao Qinghe, a senior statistician at the Chinese National Bureau of Statistics, Attributing weakness in construction Due to factors such as the drop in winter temperature and the approaching Spring Festival holiday, which marks the beginning of the industry's off-peak season.
The annual Spring Festival, also known as the Lunar New Year, begins on February 10 this year. China is usually closed for the annual week-long holiday.
Migrant workers in the country usually leave early to spend more time with their families in their hometowns, since Spring Festival may be the only time of the year that some see their families.
This is reflected in the increased propensity for travel and broader consumption seen in the January non-manufacturing PMI.
Zhao said that the business activity index of retail, land and air transportation, restaurants and other related industries rose to the expansion range, while the business activity index of rail transportation among others jumped to 60 and above. Separate version.
However, the broader economic outlook is patchy.
Pan Gongsheng, governor of the People's Bank of China, unexpectedly announced last week a reduction in the amount of liquidity banks must hold in reserves.
Later that day, Beijing released A new political mandate It aims to ease the cash crunch for Chinese developers, who are struggling under the crackdown on the sector's ballooning debts.
The real estate market declined after Beijing imposed restrictions on developers' heavy reliance on debt for growth in 2020, affecting consumer growth and broader growth in the Chinese economy.
The People's Bank of China said there was room for further easing in monetary policy. Reducing the reserve requirements that banks must hold would increase the ability of lenders to make loans and stimulate spending in the broader economy.
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