RMB banknotes arranged for photography on July 3, 2018 in Hong Kong, Hong Kong.
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Factory activity in China contracted for the fourth straight month in January, highlighting a flurry of much-needed political support for the world's second-largest economy that Beijing announced last week.
The official manufacturing PMI rose slightly to 49.2 in January from 49 in December Data from the National Bureau of Statistics Released Wednesday. This is in line with the average forecast in a Reuters poll.
The official non-manufacturing managers' index rose to 50.7 in January from 50.4 in December, according to the agency. Strength in the country's services industry helped offset weakness in the construction sector amid a decline in the real estate sector.
A PMI reading above 50 indicates expansion in activity, while a reading below this level indicates contraction.
Among the five sub-indices of the manufacturing PMI, new orders increased marginally, although output jumped by 1.1 percentage points.
Employment declined in both non-manufacturing and manufacturing sectors in December.
The construction industry business activity index, included as part of the non-manufacturing PMI, was 53.9, down 3.0 percentage points.
Pan Gongsheng, governor of the People's Bank of China, unexpectedly announced last week a reduction in the amount of liquidity banks must hold in reserves.
Later that day, Beijing released A new political mandate It aims to ease the cash crunch for Chinese developers, who are struggling under the crackdown on the sector's ballooning debts.
The real estate market declined after Beijing imposed restrictions on developers' heavy reliance on debt for growth in 2020, affecting consumer growth and broader growth in the Chinese economy.
The People's Bank of China said there was room for further easing in monetary policy. Reducing the reserve requirements that banks must hold would increase the ability of lenders to make loans and stimulate spending in the broader economy.
This is a developing story. Please check back for more updates.
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