China manufacturing index slips in December: govt

China manufacturing index slips in December: govt

BEIJING - China's manufacturing growth slowed in December for the first time in six months, official figures showed on Wednesday, suggesting the world's second-largest economy faced headwinds at the end of last year.

The purchasing managers' index (PMI) was at 51.0, down from November's 51.4, the National Bureau of Statistics said on its website. A reading above 50 signals expansion while a figure below indicates contraction.

It marked the 15th straight month of growth but it is the first time the figure has dipped from the previous month since June.

The result came in below the median 51.2 forecast of eight economists by The Wall Street Journal as reported by Dow Jones Newswires.

"The fall in the weaker-than-expected official PMI reinforces our view that growth momentum entered a downtrend" in the fourth quarter from a peak in the third, Nomura International analysts said in a research note.

British bank HSBC last month said China's manufacturing activity in December expanded at its slowest rate in three months, in its preliminary PMI index.

The bank's final PMI reading for December is scheduled to be released on Tuesday.

China's economy, an important driver of regional and global growth, expanded 7.8 per cent from July to September, snapping two quarters of slowing, but analysts warn vulnerabilities remain.

The December PMI indicates "that real activity could have slowed in the month due to continued liquidity tightness", ANZ bank economists Liu Li-Gang and Zhou Hao wrote in a separate note.

China was hit last month by a liquidity squeeze that sent interest rates soaring in a development widely seen as engineered by officials aiming to increase financial discipline over the country's banks. The financial system experienced a similar cash crunch in June.

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