China's manufacturing PMI drops to 51% in December

China's purchasing managers' index (PMI) for the manufacturing sector dropped to 51 percent in December, down from 51.4 percent in November, according to official data released on Wednesday. December marked the first time since June 2013 that the manufacturing PMI declined, according to a statement jointly released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP). In December, the sub-index for production stood at 53.9 percent, down 0.6 percentage points from November, while the sub-index for new orders lost 0.3 percentage points to 52 percent, said the statement. The sub-index for purchase quantity moved down 0.9 percentage points to 52.7 percent in December, while the sub-index for new export orders stood at 49.8 percent, down 0.8 percentage points from November. Major PMI compounds all declined in December, indicating downward pressure on the economy, said Zhang Liqun, an analyst with the Development Research Center of the State Council. He said the fall of the PMI in December reflected the fall in market demand and a cautious attitude by enterprises toward the future market. Zhang predicted that China's industrial growth and export growth may fall in the future and the downward pressure of the Chinese economywill still remain. But Zhang also added that economic growth is still in a process of stabilizing. "In general, the country's economy is still on the course of stabilization," he said. A PMI reading below 50 indicates contraction, while one above 50 signals expansion. The HSBC flash manufacturing PMI for December eased to 50.5, compared to 50.8 in November and 50.9 in October, according to HSBC's preliminary PMI released in mid-December 2013. According to Qu Hongbin, chief China economist with HSBC, the December HSBC flash manufacturing PMI reading slowed marginally from November's final reading, but stood above the average reading for the third quarter,which implied that the recovery trend in the manufacturing sector that started in July still holds.