HSBC China Manufacturing PMI By contract in December

Factory output in China back down for the second consecutive month in December, adding to concerns over the slowdown in activity in the second largest economy in the world and reinforcing expectations of additional stimulus measures needed to avoid a sharper slowdown. China's PMI of manufacturing sector from HSBC / Markit fell to 49.5 from 50 in November, contracted for the first time in 7 months.

"This means China closes the year with a sharp slowdown," said Frederic Neumann, MD and deputy head of the HSBC Asian economies. "We saw a contraction in the manufacturing sector. In fact, the number of new orders refer to further weakness. I think China should return policy loosening." "We think the growth rate next year will be around 7.3%, but depends on further easing from the central bank," added Neimann. "If they continue at current rates, the possibility of the growth rate will drop to a level of around 6%, so that additional policy easing and interest rate cuts are needed to boost the economy.

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