Daily Management Review

Business activity in China slows down


Business activity has slowed down in China, official statistics shows. Experts attribute this to coronavirus restrictions as well as the authorities' order to limit production to reduce air pollution ahead of the Olympics.

Growth in manufacturing activity in China slowed in January due to restrictions over the COVID-19 outbreak, which hit production and demand, Reuters reported.

China's official manufacturing PMI, which measures purchasing managers' monthly activity level, slowed to 50.1 in January from 50.3 in December, data from the National Bureau of Statistics (NBS) showed. The index remained above the 50-point mark separating growth in the sector from contraction. Analysts had expected the PMI to fall to 50, Reuters wrote.

The official NBS results were higher than data from a survey of small manufacturers in coastal regions, which showed activity fall at the fastest rate in 23 months, the agency noted.

The manufacturing PMI subindex was 50.9, down from 51.4 in December, while the new orders index fell to 49.3 from 49.7. The official composite PMI, which combines manufacturing and services, was 50.1 in January, down from 52.2 in December.

Although the number of new cases of COVID-19 in China was low compared with many other countries, a spike in infections since late December in the industrial hub of Xi'an has forced many car and chip manufacturers to suspend operations, Reuters wrote. Production gradually normalised as the city emerged from isolation mode, the agency noted.

At the same time, the government is trying to curb industrial air pollution ahead of the Beijing Winter Olympics. China has ordered steel mills in northern regions to cut production until mid-March, Reuters writes.

source: reuters.com