Official Chinese manufacturing PMI fell to a six-month low of 50.5 in January.
This was in line with expectations but down from 51 in December. A reading below 50 indicates contraction.
We already saw HSBC PMI fall to 49.5 in January, suggesting that manufacturing is contracting.
This was the first contraction in six months.
Economists warns about reading too much into data that is out in January or February because of the impact of the Lunar New Year holiday.
“The problem with the Lunar New Year, as far as Chinese statistics go, is that it’s lunar,” Patrick Chovanec of Silvercrest Asset Management told Business Insider ahead of the data release. “It doesn’t fall on the same day each year. Sometimes it falls in late January, sometimes in early February.”
But some attribute the slowdown in manufacturing to the slower pace of credit growth we’ve seen recently.
The official PMI surveys a larger sample than the HSBC PMI, it also has more exposure to state owned enterprises, while the latter has more exposure to small and medium enterprises.
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