China factory index: 1st contraction in 6 months

Chinese-Stocks

HONG KONG (AP) – A preliminary survey shows that Chinese manufacturing activity is contracting in January for the first time in six months.

The early version of HSBC’s purchasing managers’ index released Thursday dipped to 49.6 this month from December’s 50.5 reading. The index is based on a 100-point scale on which numbers above 50 indicate expansion.

The report adds to recent signs that the world’s biggest economy is decelerating, complicating efforts by China’s communist leaders who want to bring in sweeping reforms while keeping growth ticking along. Data released earlier this week showed China’s economy expanded 7.7 percent last year as growth slowed in the final quarter. That’s down from 2012’s 7.8 percent growth.

HSBC’s survey is based on responses from 85 to 90 percent of 420 factories.

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