The official China PMI manufacturing dropped to 49.4 in December, down from 50.0 and missed expectation of 50.0. It’s also the first contractionary reading since July 2016, and the lowest since February 2016.
In the release, CLFP noted that China-US trade frictions are starting to direct and indirect impacts on the economy. Both domestic and external demand weakened. In particular, new orders dropped -0.7 to 49.7. New export orders dipped deeper into contraction by -0.4% to 46.6, lowest since 2016. Also, downward pressure on the economy increased in the second half as seen by the persistent decline in the PMI reading.
Also from China, PMI services rose to 53.8, up from 53.4, and beat expectation of 53.2.
