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China Manufacturing Shrank Again in January

Feb. 2, 2015
The figure came after an official Chinese survey on Sunday showed manufacturing activity contracting for the first time in more than two years.

BEIJING - Chinese factory activity contracted in January for a second straight month, a closely watched private survey showed Monday, a day after the government announced the first official decline in the sector in more than two years.

British banking giant HSBC said its final purchasing managers' index (PMI) reading for January edged up to 49.7, from 49.6 in December.

But the result still showed shrinkage in the manufacturing sector of the world's second-largest economy, a key driver of global growth. PMI readings below 50 point to contraction and anything above suggests growth.

The final number was also slightly worse than the preliminary reading of 49.8, HSBC said.

"The fall in the official PMI is consistent with our expectations that (first-quarter) growth will likely be weak," economists at Goldman Sachs said in a report. 

"As the official PMI is viewed as more important by the government, the likelihood of further loosening measures has increased further."

Copyright Agence France-Presse, 2015

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