China’s manufacturing sector contracted in December.
An official measure of factory activity hit its lowest level in nearly three years and points to gathering headwinds for the world’s second-largest economy.
The official manufacturing purchasing managers index unexpectedly fell to 49.4 in December, from 50.0 in November, data from the National Bureau of Statistics showed Monday.
The result was the lowest since February 2016 and fell short of the forecasts of many economists, who predicted a reading of 50—the line between expansion and contraction.
Weakness in factory activity adds to a growing pile of indicators showing a Chinese economy that is struggling with anemic demand at home and with the effects of a global slowdown and the protracted trade fight with the U.S.
Still, the downbeat reading of the purchasing managers index suggests a turnaround won’t be quick.
Many economists expect China to meet its official growth target of about 6.5% for 2018, though some say actual growth is far lower.
A full-bore trade war with the U.S. could slash China’s economic growth by as much as 1.5 percentage points next year, according to some government advisers.