China's Manufacturing Activity Eases

The pace of China's manufacturing expansion slows in December, according to a survey of purchasing managers.

Author:: TheStreet Staff
Publish date:: Jan 2, 2011 2:32 PM EST

HONG KONG (TheStreet) -- China's manufacturing activity eased slightly in December, although it remained in expansion mode, according to a survey of the country's purchasing managers.

The China Federation of Logistics and Purchasing Saturday said its purchasing managers index (PMI) fell to 53.9 in December from 55.2 in November, the

Associated Press

reported. It was the first decline in five months, the

noted.

A reading of more than 50 indicates expansion in the economy, while a reading of less than 50 indicates contraction.

A subindex of input prices for raw materials, energy and supplies declined to 66.7 last month from 73.5 in November, the

reported.

That should be good news for China's policymakers, who are trying to put the brakes on inflation, which rose to a 28-month high of 5.1% in November.

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As part of its inflation-fighting efforts, China

raised interest rates

for the second time in three months on Dec. 25. It has also raised bank reserve requirements multiple times this year.

A rival survey of purchasing managers released earlier this week