- Goldman Sachs Group Inc.
The first economic report of 2016 showed business activity in China's manufacturing sector continued to falter for a fifth consecutive month in December, the longest such streak since 2009. According to the National Bureau of Statistics, the official purchasing managers index climbed to 49.7 last month from 49.6, the lowest level in three years in November. Nevertheless, the gauge remained below the key 50-mark threshold, which separates contraction from expansion. Furthermore, the Caixin China Manufacturing PMI declined to 48.2 in December from 48.6, indicating contraction in the sector for the 10th straight month.
Amid persistent weakness in China's manufacturing sector there was more positive news from the NBS' separate non-manufacturing PMI report, which showed the index climbed to 54.4 in December, the fastest growth in 18 months. Should Caixin's services report for December later in the week reveal a similar strength of the sector to that recorded in the official survey, it will add to signs of China's two-speed economy and reinforce the view that China's economic rebalancing found further traction at the end of 2015. China's leaders say 2015 growth can meet the target of about 7% and reassure they are ready to act to prevent a sharp slowdown. President Xi Jinping said GDP growth in the next five years should average at least 6.5% per year.
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