BEIJING (AP) — A survey of Chinese manufacturers has found their activity contracted in December in a new sign the world's second-largest economy is slowing despite government efforts to shore up growth.
HSBC Corp. said Wednesday that its monthly purchasing managers' index fell to 49.6 on a 100-point scale on which numbers below 50 show activity contracting. It was down from November's break-even 50 reading and the first contraction since May.
Beijing is trying to steer the economy to slower, more sustainable growth based on domestic consumption instead of exports and investment. But after growth fell to a five-year low of 7.3 percent in the third quarter, Chinese leaders cut interest rates unexpectedly in November in an apparent effort to stop the decline.
"Today's data confirmed the further slowdown in the manufacturing sector towards year end," said HSBC economist Hongbin Qu in a report. "We believe that weaker economic activity and stronger disinflationary pressures warrant further monetary easing in the coming months."
Overall orders fell for the first time since April, but export orders rose, according to HSBC. Factories cut more jobs.
"Data suggested that the decline was largely driven by softer domestic demand," said HSBC's report.
HSBC Corp.: www.hsbc.com