THE Purchasing Managers' Index (PMI) that officially tracks the activities of China's factories dropped to 52.9 in January, down from 53.9 the previous month. January's figure marks the lowest level in five months.
The bigger-than-expected drop in the index was seen by analysts as a positive in China's fight against inflation which has risen to over five per cent. The decline indicates that a series of interest rate hikes and credit restrictions imposed by Beijing may be having an impact, say analysts.
A PMI over 50 reflects GDP growth, whereas a figure beneath that mark indicates a contraction in the economy.