BEIJING • Growth in China's manufacturing sector slowed slightly in December as a punishing crackdown on air pollution and a cooling property market began to weigh on the world's second-largest economy.
The data supports the view that the economy is beginning to gradually lose steam after growing by a forecast-beating 6.9 per cent in the first nine months of the year, but the findings do not appear to suggest a risk of sharper slowdown at this point.
The official Purchasing Managers' Index (PMI) released yesterday dipped to 51.6 in December, down from 51.8 in November and in line with forecasts from economists in a Reuters poll.
But the overall reading still appeared relatively solid, and marked the 18th straight month that the sector has expanded. The 50-point level divides growth from contraction on a monthly basis.
The figures showed that China's full-year 2017 economic growth would be at about 6.9 per cent and around 6.5 per cent for 2018, according to the China Federation of Logistics and Purchasing, which compiles the data. Both predictions would be slightly stronger than those in a Reuters poll.
"Overall, 2017's economic performance continues to be steady and good, establishing a generally good foundation for 2018,"the federation said.
"Recent PMI surveys show companies are confident for economic development in the new year, with production and operating activity expectation indices showing significant improvement."
Sources have told Reuters that Chinese leaders are likely to stick with an economic growth target of around 6.5 per cent for 2018, the same as in 2017, even as they continue efforts to defuse the risks from a rapid build-up of debt.
In a further sign of resilience, growth in China's services sector, which was already robust, kicked up another notch in December, a sister survey showed.
The official non-manufacturing PMI rose to a three-month high of 55 from 54.8 in November.
And a reading on the construction sector rose to 63.9 from 61.4 in November, which was surprising given slowing property investment and the seasonal decline in building activity usually seen in colder months.
The services sector accounts for more than half of the country's economy, with rising wages giving Chinese consumers more spending power.
China's leaders are counting on growth in services and consumption to rebalance their economic growth model from its heavy reliance on investment and exports.