Chart of the day: Moderating momentum in China

The mixed purchasing managers’ index figures suggest that growth momentum in the Chinese economy, particularly in the manufacturing sector, may have moderated somewhat in the early weeks of 2018, although the service sectors have been fairly stable, according to Dong Chen, senior Asia economist at Pictet Wealth Management. The new export orders subindex declined significantly in January, to 49.5, after having risen strongly to 51.9 in December. In Chen’s view, this drop can largely be explained by seasonal factors such as Christmas orders. Domestic demand is showing continued signs of slowdown in the first quarter as growth in fixed-asset investment declines and the government strengthens the enforcement of environmental standards. Looking ahead, Chen expects Chinese growth to decline moderately this year after a strong 2017.