Official data on Monday showed that China's purchasing managers' index (PMI) for its domestic manufacturing sector came in at 49.1 in January, down from 50.1 in December.

That's below the 50-mark separating growth from contraction.

The PMI for China's non-manufacturing sector, which includes services and construction, was also lower in January coming in at 50.2, down from 52.2 in December.

Meanwhile, the combined profit of major industrial enterprises went up 11 percent year on year in December 2024, the National Bureau of Statistics (NBS) said on Monday.

NBS statistician Zhao Qinghe said the PMI data in January was influenced by factors such as the approaching Chinese New Year holiday and enterprise employees' returning home for festival reunions.

The world's second-largest economy hit the government's growth target of around five percent over 2024, but exports and industrial output far outpaced retail sales and unemployment remained elevated.

US President Donald Trump's threat to impose a 10 percent punitive duty on Chinese imports on February 1 also adds to the lingering uncertainty surrounding the economy.

China's trade surplus reached almost US$1 trillion last year, as producers looked to shift stocks overseas to counter weak domestic demand.

The country's outbound shipments were further assisted by factory gate deflation and a weak yuan, making Chinese goods more competitive in global markets.

Back at home, falling prices affected corporate profits and workers' incomes.

Policymakers have promised to roll out further stimulus over 2025, in addition to the ones already implemented last year, as Beijing prioritises revitalising domestic demand.

Getting mainland consumers spending again would reduce producers' exposure to Trump's tariff threats, which he said could be as high as 60 percent.

State leaders are also hoping last year's policy support measures will increase demand in the struggling property sector and ease developers' financial difficulties, which affects domestic demand and local government finances. (Xinhua/Reuters)