Chinese PMI shows distinct weakness

The Chinese economy showed distinct signs of a slowdown in December, with business surveys of manufacturing and services sectors showing weakening for first time in months.

Four purchasing manager's indexes were compiled, two by the government and two HSBC Holdings PLC, the first time it had happened since April.

The HSBC Services PMI, released today, was down at 50.9 for December, as against 52.5 the month before. A figure above 50 points to expansion, while below that level indicates contraction.

HSBC's PMIs are worked out on the basis of responses from thousands of companies about changes in business conditions. The two indexes read together point to a softening of China's economy.

China looks set for gross domestic product growth of about 7.6 per cent in the final quarter of 2013, as against 7.8 per cent in the third, according to economists. According to commentators, the slowdown partly reflected tightening credit conditions as China's central bank tried to rein in a debt pile.