Chinese factory activity falls to three-year low - Caixin

Chinese factory activity dwindled by the most in almost three years last month, according to data published on Friday.

The Caixin/Markit manufacturing purchasing managers’ index for January fell to 48.3 from 49.7 in December, marking its worst reading since February 2016 and missing expectations for a reading of 49.5.

A large part to a slump in both output and new orders was behind the slump, while stocks of purchases was also found to have dropped sharply, all pointing to softer domestic demand.

In contrast, the survey found export orders crept up.

Shilan Shah at Capital Economics pointed out that the Caixin PMI paints a much bleaker picture than the official PMI reading released from a day earlier.

"With the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify, China’s economy is likely to weaken further over the coming months."