China's January manufacturing PMI falls to 50.4 pct

The purchasing managers' index (PMI) for China's manufacturing sector fell to 50.4 percent in January from 50.6 percent in December, the China Federation of Logistics and Purchasing (CFLP) said Friday.

January marked the fourth consecutive month that the PMI remained above 50 percent, according to a statement from the CFLP.

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

However, the indicator also dropped for the first time since August when it hit a nine-month low of 49.2 percent.

The slight retreat suggests that China's economic growth will exhibit a steady trend in the near future, said Zhang Liqun, an analyst from the Development Research Center of the State Council, or China's cabinet.

Both the sub-indices for new orders and raw material inventories went up in January from a month earlier, reflecting stronger demand and corporate confidence, the CFLP statement said.

Although manufacturers are continuing to expand, lower sub-indices for export orders and overstocked products point only to stable production activity instead of robust growth, Zhang said.

The PMI figure, released jointly by the CFLP and the National Bureau of Statistics, diverged from the HSBC's flash PMI reading issued last week.

The PMI for China's manufacturing sector climbed to 51.9 percent in January, marking a two-year high, according to the bank.