China's manufacturing contracted for a second month in December as global growth faltered and Premier Wen Jiabao prolonged a crackdown on speculation in the housing market.
The index was 48.7 in December, HSBC Holdings Plc and Markit Economics said today. That compared with a preliminary result of 49 reported on Dec. 15 and a final reading of 47.7 for November. A reading above 50 indicates expansion.
The central bank may cut lenders' reserve requirements before a Lunar New Year holiday starting Jan. 23 that will fuel demand for cash, according to Bank of America Merrill Lynch. Last month's half percentage-point reduction, the first since 2008, indicated that the government is putting a bigger focus on supporting growth as inflation cools.
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