China's manufacturing sector shows resilience despite January contraction

China's factory activity contracted slightly in January, following a return to expansion for the first time in nearly a year in December, official data showed on Saturday.

The official purchasing managers' index (PMI) for the manufacturing sector fell to 49.3 in January, down from 50.1 in December, indicating a mild contraction as it slipped below the 50-point threshold that separates expansion from contraction, according to data from the National Bureau of Statistics.

Despite the overall contraction, key segments of the manufacturing sector continued to show resilience. The PMI for high-tech manufacturing came in at 52 in January, remaining at or above 52 for two consecutive months. The PMI for equipment manufacturing stood at 50.1, signaling expansion in the sector.

Meanwhile, the subindex tracking manufacturers' expectations for production and business operations reached 52.6 in January, remaining above the threshold and pointing to relatively strong confidence among manufacturers.

Huo Lihui, an NBS statistician, attributed the January decline in the headline PMI to the traditional off-season for manufacturing, combined with still-weak market demand. She noted that certain manufacturing industries entered a seasonal slowdown in January, while effective demand remained insufficient.

Data showed that the subindex for production dipped to 50.6 in January, down from 51.7 in December, while the subindex for new orders fell to 49.2 from 50.8, the NBS reported.

Meanwhile, China's non-manufacturing PMI, which tracks the services and construction sectors, also experienced a slight decline, dropping to 49.4 in January from 50.2 in December. The services PMI edged down to 49.5 from 49.7.

The country's official composite PMI, which tracks overall output in both manufacturing and non-manufacturing sectors, fell to 49.8 in January from 50.7 in December, NBS data showed.