ECONOMY

China Factory Activity Slips Back Into Contraction

Published: Feb. 2, 2026 5:36 p.m. GMT+8

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China’s manufacturing activity fell back into contraction in January, weighed down by a seasonal slowdown and weak demand at home and abroad.

Official data released Saturday showed that the manufacturing purchasing managers’ index (PMI) fell to 49.3, while the non-manufacturing business activity index dropped to 49.4, both below the 50 threshold separating expansion from contraction.

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China’s January manufacturing PMI fell to 49.3 and non-manufacturing to 49.4, indicating contraction.
Weak domestic and external demand, seasonal slowdown, and new export order declines contributed to weaker performance.
Large firms expanded; small and midsize firms contracted further, with over a third of companies reporting lower profits due to squeezed margins.

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