Chinese President Xi Jinping on Monday said that his country will guard against and defuse risks in key areas and external shocks in 2025, to promote sustained economic recovery.
Xi was speaking at a high-level reception to ring in the Chinese New Year, according to China’s state-run agency, Xinhua.
China's manufacturing activity shrank in January for the first time in four months, official data showed Monday, as Beijing battles to sustain the recovery in the world's second-largest economy.
Policymakers have battled to reverse a post-pandemic slump driven by a crisis in the property sector, weak consumption and high government debt.
The Purchasing Managers' Index (PMI) - a key measure of industrial output - came in at 49.1 in January, according to the National Bureau of Statistics (NBS), below the 50-point mark that separates growth and contraction.
The reading was down from 50.1 in December, which was its third straight month in positive territory after ending a six-month decline in October.
January's slide was “affected by the approaching Lunar New Year holiday and the concentrated return of business employees to their hometowns,” NBS statistician Zhao Qinghe said.
Both production and demand slowed in the run-up to the eight-day public holiday from January 28 to February 4, Zhao said.
“Economic momentum unexpectedly slowed in both manufacturing and service sectors ahead of the Chinese New Year,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note.
“Part of the slowdown may be due to weaker external demand, as the new export orders index dropped to the lowest level since March last year,” Zhang added.
Beijing has unveiled a string of aggressive measures in recent months aimed at boosting growth, including cutting interest rates, cancelling restrictions on homebuying and easing the debt burden on local governments.
But economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore full health in the economy, which has struggled to fully recover since the Covid-19 pandemic.
In the markets, China stocks fell on Monday, the last day before the Lunar New Year holiday, as a surprise contraction in manufacturing activity and lingering concerns about US tariffs offset the optimism from government efforts to introduce long-term capital. However, in Hong Kong, tech shares led the market higher.
The Shanghai Composite Index finished down 0.1% at 3,250 while the Hong Kong benchmark Hang Seng Index was up 0.7% at 20,197.
Meanwhile, US President Donald Trump’s threats to impose tariffs and sanctions on Colombia - now on hold after a deal was reached - reminded investors that Trump is serious about his tariff pledges.
(The) “Tariff risks might have been delayed, but not derailed,” Morgan Stanley said in a note, estimating that weighted average tariff rate on China will rise from 10% at the end of 2024 to 26% by the end of 2025 and 36% in 2026.
These concerns dampened the excitement from signs that institutional money is starting to flow into the stock market after Beijing set specific targets last week to introduce long-term capital from insurers and mutual funds.
Three insurers, including China Pacific Insurance and Taikang Life, got regulatory approval to invest 52 billion yuan ($7.16 billion) into stocks via a newly-established fund, state media reported.
