China's January factory growth misses expectations as exports decline ahead of U.S. tariffs, Caixin PMI shows
China's factory activity slowed in January as export orders dwindled ahead of additional U.S. tariffs that are set to come into effect Tuesday, a private-sector survey showed Monday.
The seasonally adjusted Caixin/S&P Global manufacturing purchasing manager's index came in at 50.1 in January, missing Reuters poll forecast of 50.5.
Manufacturing PMI stayed above the 50 level that separates expansion from contraction for a fourth straight month, but it nudged down from 50.5 in December, 51.5 in November and 50.3 in October.
The private survey reading follows the official PMI data in January that showed activity unexpectedly contracted to 49.1, after expanding for three straight months, reinforcing calls for more stimulus to spur growth. Reuters had forecast PMI to come in at 50.1.
Domestic demand improved in January while new export orders fell for a second straight month, as overseas demand for consumer goods declined, according to the survey. The employment sub-index also slumped to the lowest level in nearly five years, as businesses remained cautious amid economic uncertainty.
Shipment orders have started to soften after exporters rushed to front-load them toward the end of last year, Lynn Song, chief China economist at LNG told CNBC. "This side is likely to remain under pressure in the coming months, particularly if the U.S. tariffs do indeed come into effect on Feb. 4."
Domestic orders will need to "play a larger role in driving manufacturing in 2025, as we can see tariffs are starting to take effect," he added.
U.S. President Donald Trump on Saturday signed executive orders to impose 10% tariffs on Chinese goods — 25% on Mexican and most Canadian imports — starting Tuesday.
On his first day in office last month, Trump