China ends 2014 with lowest manufacturing growth

An official survey says China’s manufacturing growth dropped in December to its lowest level in 2014.

According to the data released by the government, the official purchasing managers’ index slipped to 50.01 in December from 50.03 recorded a month earlier.

The downturn in activity has been blamed on cooling demand, rising costs and a struggling property market. New factory orders also contracted for the first time since April.

The news has reinforced expectations that the world’s second-largest economy will roll out more stimulus to halt the sharp slowdown. The move can trigger job losses and debt defaults.

The slump in growth will also increase pressure on countries such as Brazil and Australia, which rely heavily on exports of commodities to fuel China’s factories.

In late December, China reported a two-year low in its industrial profit as a result of overcapacity in industrial activity, reduced factory-gate prices and recession in the housing sector.

China’s central bank unexpectedly cut interest rates in November for the first time since 2012 in an attempt to revive the economy. It is also reported to have plans for allowing cash banks to grant loans to financial institutions without requiring them to set aside reserves.