Home GRASP/China Growth in China's factories, services slow down in December: PMI

Growth in China's factories, services slow down in December: PMI

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NewsHubChina’s manufacturing sector expanded for a fifth month in December, but growth slowed a touch more than expected in a sign that government measures to rein in soaring asset prices are starting to have a knock-on effect on the broader economy.
The official Purchasing Managers’ Index (PMI) stood at 51.4 in December compared with 51.7 in November. A reading above 50 indicates an expansion on a monthly basis while one below 50 suggests a contraction. December’s reading was slightly below the forecast in a Reuters poll for 51.5.
Rolls of steel are stacked inside the China Steel Corporation factory, in Kaohsiung, southern Taiwan. Reuters
A housing boom in the second half of 2016 and a government spending spree on infrastructure have helped boost prices for commodities from cement to steel, giving the manufacturing sector a much-needed lift. But the government is cracking down on speculative property buying, and signals from policymakers that more will be done to contain asset bubbles and rising debt – even at the expense of slower growth – means extra stimulus measures could be limited.
« Today’s PMI figures suggest that the change of policy tone has taken its toll, as the authorities are seriously concerned about the asset bubbles, » said Zhou Hao, senior economist at Commerzbank.

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