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The
official manufacturing Purchasing Managers' Index (PMI) likely
edged down to 49.6 in January from December's 49.7, according to
a median forecast of 20 economists in a Reuters poll.
A reading below 50 index points suggests a contraction in
activity, while a reading above indicates an expansion on a
monthly basis.
As the first indication of economic sentiment in 2016, the
headline data might be distorted by the week-long Lunar New Year
break, which begins on Feb. 7, analysts said.
"Manufacturers shut factories weeks before China's Lunar New
Year Holiday, which would drag down factory output," said Zhang
Yiping, an economist of China Merchants Securities in Shenzhen.
"We expect China's economic growth to show a certain degree of
slowing down in the first quarter."
Aside from seasonal factors, analysts noted that China's economy
would continue to fight headwinds from industrial overcapacity,
high debt and a cooling property market this year.
China's economic growth cooled to 6.9 percent in 2015, the
slowest pace in 25 years, adding pressure to policymakers who
are already struggling to restore the confidence of investors
after a renewed plunge in stock markets and the yuan currency.
China markets began the year with a series of precipitous stock
market declines and a sharp depreciation in the yuan. Selling
pressure has persisted as economic data confirmed slowing growth
and deteriorating business conditions.
The official PMI number will be released on Feb. 1, along with
the official services PMI.
(Reporting By Xiaoyi Shao and Nicholas Heath; Editing by Sam
Holmes)
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