Key index of Chinese factory activity shows contraction

A key measure of factory activity in China Monday
showed manufacturing contracted for the second straight month in
January, according to a private survey, the day after similarly
downbeat results from the government, dpa reported.
The purchasing manager's index by financial services company HSBC
rose slightly to 49.7 for the month from 49.6 in December. It was the
second consecutive month with a final reading below 50.
A figure above 50 generally means a positive outlook in the
manufacturing sector, while below 50 is taken as a negative reading.
The reading was adjusted to account for seasonal factors, the report
said, as the weeks leading up to the Lunar New Year celebrations are
generally slower for manufacturing.
"Demand in the manufacturing sector remains weak and more aggressive
monetary and fiscal easing measures will be needed to prevent another
sharp slowdown in growth," said HSBC Chief China Economist Qu
Hongbin.