The pace of expansion in China's manufacturing sector has slowed to a 18-month low in December, a Reuters poll suggested. The poll hinted at signs of a protracted slowdown in the world's second-largest economy that may prompt authorities to roll out more stimulus measures.

 According to a median forecast of 11 economists, the official manufacturing Purchasing Managers' Index (PMI) for December may have dropped to 50.1, the weakest level since June 2013. The PMI reading for November stood at 50.3.
The PMI reading will be released on Thursday. A reading above 50-point level indicates an expansion in activity while one below that points to a contraction on a monthly basis.
"We expect the manufacturing sector to remain sluggish in December, in line with a continued slowdown in the economy as the property sector weighs," said Nie Wen, an economist at Hwabao Trust in Shanghai.

A preliminary PMI survey released earlier this month by HSBC/Markit showed activity in the factory sector contracted in December for the first time in seven months.

The official PMI is focused on larger, state-owned factories, as opposed to the HSBC/Markit PMI which focuses more on smaller manufacturers in the private sector. Smaller firms have been facing greater strains, including higher financing costs, though recent data have suggested larger firms are also succumbing to the pressure from the prolonged downturn.

Chinese factories are struggling to cope with widespread excess capacity and falling prices that hurt their bottom lines.

Official data released on Saturday showed Chinese industrial profits dropped 4.2 per cent in November for a year earlier, the biggest annual decline since August 2012.

Many analysts expect economic growth in the fourth quarter to slow marginally from 7.3 per cent in the third quarter, suggesting full-year growth will undershoot the government's 7.5 per cent target and mark the weakest expansion in 24 years.

Economists who advise the government have recommended that China lower its growth target to around 7 per cent in 2015.

The government is expected to announce more stimulus, such as cutting bank reserve ratios or interest rates, to ward off a sharper growth slowdown could fuel job losses and debt defaults.

The central bank unexpectedly cut interest rate cut for the first time in two years on November 21, while the economic planing agency has been approving more infrastructure projects to help spur growth.
China's official December PMI reading seen dipping to 18 month low China Manufacturing Output Index,for more information about china world news visit site at http://youtube.com/user/cosmeticmachines as well as business website at http://penglaichina.com

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