China's manufacturing activity growth slowed to a three-month low in December, preliminary results of a business survey by Markit Economics and HSBC Ltd. showed Monday, suggesting its economic recovery may be losing momentum.
The HSBC Flash China Manufacturing Purchasing Managers Index (PMI), a gauge of nationwide manufacturing activity of the world's second-biggest economy, slipped to 50.5 from 50.8 in November on a 100-point scale. But the December index still stayed above the key 50 percent line.
A PMI reading above 50 percent indicates growth from the previous month, while a reading below 50 represents contraction in China's manufacturing sector. The index is a closely watched barometer of the health of the Chinese economy. "The December reading slowed marginally from November's final reading. But it still stands above the average reading for the third quarter, implying that the recovering trend of the manufacturing sector starting from July still holds up," HSBC economist Qu Hongbin said in a statement accompanying the data.
"As a result, we expect China's GDP growth to stabilize at around 7.8 percent in the fourth quarter," Qu said.
China's economy expanded 7.8 percent year-on-year in the third quarter, which was above the government-set 2013 growth target of 7.5 percent.