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China Manufacturing Growth Eases In December

china 161213

China's factory sector activity slowed in December as output growth weakened and employment contracted further, preliminary results of a survey published by Markit Economics revealed Monday.

The headline HSBC purchasing managers' index fell to a three-month low of 50.5 in December from 50.8 in November. However, the above-50 reading indicates expansion of the sector.

The December reading "still stands above the average reading for the third quarter, implying that the recovering trend of the manufacturing sector starting from July still holds up," HSBC chief economist Hongbin Qu said.

The manufacturing output index slid to 51.8 in December from 52.2 in November, indicating a slower rate of expansion. Employment contracted again and at a steeper rate than in November, the survey found.

However, new order growth accelerated from previous month. New export orders also increased at a faster pace.

At the conclusion of the annual Economic Work Conference in Beijing last week, Chinese leaders said the government should seek a "reasonable" growth for the economy, but stopped short of announcing a specific growth target.

Earlier, the government set a GDP growth target of 7.5 percent for 2013.

The meeting decided to coordinate short-term measures and a long-term mechanism to defuse the local government debt risks, according to a statement released after the conference. Also, the leaders pledged to slash industrial overcapacity.

The conference reiterated China's commitment to deeper economic reforms and urged fast-tracking of free trade negotiations.

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