China’s New Covid-19 Outbreaks Trip Up Economic Momentum from wisepowder's blog

China’s New Covid-19 Outbreaks Trip Up Economic Momentum

China’s economy started the new year on a weaker footing as new coronavirus outbreaks and pandemic-containment measures sapped factory production and weighed on the country’s services recovery, official data showed Sunday.To get more China economy news, you can visit shine news official website.

Official gauges of industrial and services activities eased more than expected in January, with demand taking a particular hit as authorities discouraged travel ahead of February’s Lunar New Year festival, according to data from Beijing’s National Bureau of Statistics.

China’s official manufacturing purchasing managers index softened to 51.3 in January, lower than December’s 51.9 reading and the 51.5 median forecast among economists polled by The Wall Street Journal.

The nonmanufacturing PMI, which includes services and construction activity, weakened even more to 52.4, from 55.7 in December, according to the statistics bureau.Though both indexes showed activity remaining above the 50 mark that separates expansion from contraction, the new-orders subindex for the nonmanufacturing sector, a key measure of demand, dropped below the 50 line—to 48.7 from 51.9 the previous month—marking the lowest level since February last year, when the Chinese economy was absorbing the very worst of the coronavirus shock.

Sunday’s PMI readings provided the first look at the economic damage wrought by fresh outbreaks of the coronavirus in northern China—the worst since the initial outbreak that began in Wuhan about a year ago. The latest wave has sickened hundreds and put restrictions on the movements of millions of people.

To keep the number of cases from rising further, government authorities nationwide are dissuading residents from traveling during the most important holiday of the year, Lunar New Year, which runs for a week beginning Feb. 12.

The stricter quarantine and testing requirements imposed during this frantic season—when hundreds of millions of people typically travel to see family and splash out on gifts and dining—are likely to restrain economic activity.

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