China's Manufacturing Activity Contracts in January Amid Weak Demand

China's manufacturing sector experienced a slight contraction in January, with the official Purchasing Managers' Index (PMI) falling to 49.3 from December's 50.1, according to the National Bureau of Statistics. A PMI below 50 indicates contraction in the sector.

The decline is attributed to the traditional off-season for manufacturing and persistent weak market demand. Huo Lihui, a statistician with the National Bureau of Statistics, noted that some manufacturers typically enter a slow period in January, and market demand remains weak.

Sub-indices for new orders and new export orders also declined, dropping to 49.2 and 47.8 respectively, from December's 50.8 and 49.0. The non-manufacturing PMI, which includes services and construction, decreased to 49.4 from 50.2 in December, marking its lowest point since December 2022.

Despite the overall contraction, certain segments of the manufacturing sector showed resilience. The PMI for high-tech manufacturing remained at or above 52 for two consecutive months, indicating continued expansion in this area.