Investing.com - China’s factory activity rose slightly in January but stayed below the 50 mark that separates growth from contraction, the National Bureau of Statistics said on Thursday.
January’s official Purchasing Managers' Index (PMI) was up a tick at 49.5 from 49.4 in December and better than the expected 49.3.
A reading above 50 signals expansion in the sector from the previous month, while one below 50 represents contraction. Activity in China’s manufacturing sector has shrunk for the second straight month.
Meanwhile, the services PMI for January came in at 54.7, better than the 53.8 reported in the previous month.
Despite the better-than-expected PMI numbers, some economists said the data still suggests a weakening Chinese economy, and that China might be at risk of a sharper-than-expected slowdown if the trade war with the U.S. drags on.
"While the official manufacturing PMI didn't weaken any further in January, it still suggests that the economy lost momentum at the start of the year," Marcel Thieliant, senior economist at Capital Economics, wrote in a note that was cited by CNBC.
High-level Chinese and U.S. officials began a new round of trade talks on Wednesday, as the two sides try to reach a deal before a March 1 deadline that could usher in higher U.S. tariffs on Chinese goods.