China's Manufacturing Woes: A Call for Economic Revitalization

China's manufacturing activity contracted in January, raising concerns about the country's economic health. The official PMI fell below expectations, highlighting reliance on exports amidst weak domestic demand. Policymakers are called to stimulate the economy, focussing on revitalizing domestic consumption and addressing trade tensions with the U.S.

China's manufacturing sector experienced unexpected contraction in January, according to an official factory survey unveiled on Monday. The purchasing managers' index (PMI) dropped to 49.1, marking its lowest point since August, and missing a Reuters poll's median forecast of 50.1.

The $18 trillion economy successfully met its growth target of 'around 5%' for last year, thanks to extensive exports and industrial production. However, this success has overcast the underperformance in retail and persistent unemployment. Looming tariffs from the United States could expose China's dependency on exports.

To counter the domestic demand weakness and potential U.S. trade tariffs, Beijing is exploring stimulus measures that might focus more on industries than households, despite calls to prioritize consumer spending.

(With inputs from agencies.)