China's factory activity shrinks in December

Beijing

ACTIVITY in China's industrial sector contracted in December for the first time in seven months, the latest in a string of weak economic indicators that will intensify calls for more stimulus measures to head off a hard landing. The flash HSBC/Markit manufacturing purchasing managers' index (PMI) fell to 49.5 in December from November's final reading of 50.0 and below the 50.0 forecast by analysts.

The new orders sub-index fell to 49.6, the first contraction since April. "The manufacturing slowdown continues in December and points to a weak ending for 2014," Hongbin Qu, chief economist for China at HSBC, said after the survey was released on Tuesday. "The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months."