China’s factory activity showed signs of slowing down in January as the country readied itself for the impact of forthcoming U.S. tariffs, according to a private-sector survey released Monday.
The Caixin/S&P Global manufacturing purchasing manager’s index (PMI) registered at 50.1, slightly below the 50.5 anticipated by a Reuters poll.
Despite remaining just slightly above the critical 50-point threshold that demarcates growth from contraction for the fourth consecutive month, the January PMI reading softened from 50.5 in December, 51.5 in November, and 50.3 in October. This indicates a tempered expansion in the manufacturing sector.
The latest Caixin survey follows the government’s official PMI data, which unexpectedly showed a contraction in January with a reading of 49.1, after showing growth for the previous three months, accentuating the need for additional stimulus to invigorate economic growth. Reuters had predicted the PMI to align at 50.1.
This backdrop coincides with U.S. President Donald Trump’s weekend signing of executive orders to impose a 25% tariff on Mexican and most Canadian imports alongside a 10% levy on Chinese products, effective Tuesday.
As China’s economy grapples with a slowing growth trajectory, it successfully met Beijing’s growth target of 5.0% last year. Nevertheless, it continues to face challenges such as weak domestic demand and an enduring real estate slump, positioning exports as a pivotal element in sustaining growth amid these broader market concerns.