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China reports a slowdown in manufacturing growth

in International Business

China reports a slowdown in manufacturing growth

china manfacutring sectorOne of the biggest drivers of Chinese economic growth, the manufacturing sector shows signs of contraction yet again.

The Purchasing Managers’ Index (PMI), a key indicator of activity in the manufacturing sector, fell to 50.04 in January from 50.6 in December.

The PMI for smaller firms, however, rose to 52.3 in January from 51.5, according to HSBC.

 A reading above 50 in the index shows expansion.

This comes as China’s economy is experiencing a new leadership in its government.

“The economy is in the midst of mid-cycle upswing… there is sufficient economic momentum and political impetus to ensure a continuation of the current expansionary phase,” said Alistair Thornton, senior China economist at IHS Global Insight.

“Businesses may be taking a wait-and-see attitude prior to the government transition in March. It is important not to rush to the conclusion that the economy is taking a nose-dive again.”

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