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People's Daily Online>>China Business

PMI may be weak in January

By Wang Yanlin (Shanghai Daily)

09:15, January 21, 2012

CHINA'S manufacturing activities may stay weak in January, a preliminary reading for the HSBC Purchasing Managers' Index showed yesterday.

The HSBC Flash PMI, the earliest available indicator of China's industrial sector, touched 48.8 in January, a three-month high but still less than 50. A reading below 50 signals contraction.

The pace was slightly higher than the final reading of 48.7 in December.

Commenting on the data, Qu Hongbin, chief economist for China at HSBC, said they suggested China's economic growth is likely to moderate further.

He said the slowdown in investment and exports indicates that more headwinds may be looming and manufacturers may face pressure to cut inventories in the coming months.

Qu predicted the government may ease policies to try to stabilize growth and may cut bank reserve requirement ratio in the first quarter to boost market liquidity.

Growing demand in the run-up to the new year and the Spring Festival helped accelerate industrial production growth in December to 12.8 percent year on year from November's 12.4 percent, according to the National Bureau of Statistics.

China's economy grew 8.9 percent on an annual basis in the final quarter of last year.

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