In January, China’s manufacturing output declined for the fourth consecutive month

Senior statistician Zhao Qinghe of China’s National Bureau of Statistics (NBS) ascribed the construction industry’s weakness to elements including the winter’s low temperatures and the impending Spring Festival vacation, which ushers in the off-peak season for the sector.

This year’s Spring Festival, also referred to as the Lunar New Year, begins on February 10. Usually, China is closed for the week-long holiday.

Since the Spring Festival may be the only time some migrant workers see their families all year, they usually leave earlier to spend more time with them in their hometowns.

This is mirrored in the non-manufacturing PMI for January, which shows a greater inclination for travel and overall consumption.

According to a second announcement from Zhao, the business activity index for railway transportation has increased to 60 or higher, while the indexes for retail, road and air transportation, catering, and other associated businesses have moved into the expansion range.

However, the forecast for the economy as a whole is not great.

The governor of the People’s Bank of China, Pan Gongsheng, abruptly stated last week that banks would no longer need to retain as much liquidity as reserves.

Later in the day, Beijing unveiled a new policy directive designed to relieve Chinese developers of the financial strain caused by the industry’s crippling debt.

After Beijing tightened down on developers’ excessive reliance on debt for growth in 2020, the property market collapsed, which hurt consumer consumption and the expansion of the Chinese economy as a whole.

According to the PBOC, more monetary policy easing is possible. Banks will be able to offer loans more readily and encourage expenditure throughout the economy if reserve requirements are lowered.

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