In December this year, the China HSBC Flash Manufacturing Purchasing Managers Index (PMI) decreased to 49.5 - the lowest level of the past seven months and also the first time the figure has dropped below 50 in the past seven months - down from October's final reading of 50.0, as announced by the HSBC on December 16. Meanwhile, the new order index decreased to 49.6, constituting an eight-month low.
Hongbin Qu, the HSBC's chief economist for China, said that the decline of the flash PMI in December has mainly been due to sluggish domestic demand. During the Asia-Pacific Economic Cooperation (APEC) meeting in Beijing, the suspension of operations of some industries exerted a negative impact on the performance of the production sub-index. Furthermore, prices of commodities, including crude oil, have recently indicated significant declines, also affecting the PMI. The HSBC official said that the Chinese government might loosen its monetary policy further as disinflationary pressures remain strong and as growth in manufacturing has slowed down.