China Mfg. Dwindles Even More than Thought

Figures released Monday show activity in China’s manufacturing sector contracted for the first time in more than two years in December amid a domestic economic slowdown and Beijing’s ongoing trade dispute with the U.S.

The Chinese National Bureau of Statistics said on Monday official manufacturing Purchasing Managers’ Index (PMI) was 49.4 — lower than the 49.9 analysts expected. The December reading was the weakest since February 2016, and even worse than November’s official manufacturing PMI, which was 50.0. A reading above 50 indicates expansion, while a reading below that signals contraction.

In particular, new export orders contracted for a seventh straight month, with that measure falling to 46.6 from 47.0 in the previous month.

Meanwhile, China’s official non-manufacturing PMI came in at 53.8, which was higher than the reading of 53.4 in November.

Economic data from the world’s second-largest economy is being closely watched for signs of damage inflicted by the ongoing trade war between Washington and Beijing.