China’s manufacturing activity contracts in December | Daily News

China’s manufacturing activity contracts in December

China’s manufacturing activity in December contracted for the first time in over two years, official data showed on Monday (Dec 31), amid a bruising trade war with the United States and a slowing domestic economy.

The manufacturing Purchasing Managers’ Index (PMI), a gauge of factory conditions, came in at 49.4 for the month, down from 50.0 in November, according to official figures from the National Bureau of Statistics (NBS).

Marking its lowest point in over two years, the PMI fell below the 50.0 mark separating expansion from contraction.

“Some industries have gradually entered the off-season of production, and companies are cautious about the recent market expectations,” said NBS statistician Zhao Qinghe in a statement.

“Second, due to factors such as more external environmental variables and slower internal demand, the recent import and export boom has been lower.”

He noted that the average PMI for 2018 has been 50.9, but a slowdown in global economic growth and international trade friction had impacted China’s manufacturing industry.

After spending much of the year locked in a trade war, China and the US are now reportedly preparing for talks after a 90-day truce agreed between Donald Trump and Xi Jinping in Argentina earlier this month.

Washington and Beijing have imposed tit-for-tat tariffs on more than US$300 billion worth of goods, and the bruising trade conflict has spooked markets worldwide.

Trump is seeking a massive reduction in the US trade deficit with China and deeper reforms to open the economy to foreign companies.

In a sign of thawing relations, China on Friday said it would approve US rice imports.

Earlier this month, China’s major state-owned grain stockpiler said it had resumed buying US soybeans, and Beijing announced it would suspend extra tariffs on US-made cars and auto parts starting Jan 1.

China is also targeting intellectual property theft in the country, one of the main sticking points in the dispute with the US.

Channel NewsAsia


 

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