Written by Liz Lee and Joe Cash
BEIJING (Reuters) – An official survey of factories on Monday showed that the activity of manufacturing industries in China was unexpected in January, the weakest level since August, keeping invitations to motivate in the second largest economy in the world.
The official index of purchasing managers shrinkled to 49.1 in January from 50.1 in December, which is less than the fifty level between growth and shrinkage and contradicts the average expectations of a Reuters poll at 50.1.
China's economy of $ 18 trillion achieved the goal of government growth “about 5 %” during the year 2024, but in an unbalanced manner, with exports and industrial production to retail sales and unemployment remain high.
US President Donald Trump's threat to impose 10 % punitive fees on Chinese imports on the first of February to push Beijing to suppress the smuggling of chemicals of fentanel threatens to reveal the extent to which its economy depends on exports to achieve growth.
The trade surplus of China reached a trillion dollars last year, as the producers aspired to convert their stocks abroad to meet the weak domestic demand. The country's external charges have helped more shrinkage of the factory and the weak yuan, making Chinese goods more competitive in global markets.
But at home, the price decreased on corporate profits and the entry of workers.
The index of non -manufacturing purchasing managers, which includes services and construction, slowed to 50.2 out of 52.2 in December.
Policy makers promised to offer more incentives during the year 2025, but analysts are concerned that they will continue to focus on industrial development and infrastructure, instead of families, which may exacerbate the excessive ability in factories, weaken consumption and increase the deflationary pressures.
Beijing pledged to give priority to stimulate the local demand, but it only revealed little except for the recently expanded trade program that supports the purchase of cars, devices and other commodities.
Chinese leaders also hope that policy support procedures late last year increase demand in the struggling real estate sector and reduce the financial difficulties faced by developers, which greatly affects local governmental and financial demand.
Makes Chinese consumers spend again that would reduce the exposure of producers to Trump's customs threats, which he said during his election campaign could reach 60 %.
And analysts, Reuters, expected their views that the Caixin Procurement Manager Index for the private sector would remain at 50.5. The data will be released on January 31.
