December's Purchasing Managers Index (PMI) in China rose slightly from November's all time low to 41.2. However, a level below 50 indicates shrinkage of the manufacturing sector. This is the third month in a row of contraction.
Monthly export figures are expected to show December was another bad month after the first decline in seven years was recorded in November.
It is being reported that thousands of factories have closed. It will be interesting to see if there are reports of many factories not opening after Chinese New Year.
None of this is a surprise. What it means is November was not the bottom for the Chinese manufacturing sector. We believe things will recover sooner than the media and government seem to be indicating, but we are still in a difficult time. It is a vital time for communication with all partners in the supply chain. Don't let the distance and differences in culture cause you to spend less time talking with you partners in China.
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