China economy: A reading above 50 indicates expansion, while a reading below 50 reflects contraction, according to Xinhua China. The index, below the market forecast of 49.6, fell to its lowest level since August 2012, as China economy is seeking new growth engines amid a housing market slowdown and a campaign to cut industrial overcapacity. The purchasing managers' index came in at 49.4, down from December 49.7, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing. NBS statistician Zhao Qinghe attributed the retreat to slowing factory activity ahead of the Chinese New Year holidays in early February, as well as the trimming of industrial capacity. China stock market opened lower following the data release, with the benchmark Shanghai Composite Index down 0.24 percent at 2,730.98 points. The economic slowdown both at home and abroad also affected aggregate demand and foreign trade growth, Zhao explained.
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