Business activity in China slowed in January, suggesting the economy remains relatively wobbly despite several stimulus measures from China’s government and central bank. Soft domestic demand and relatively tight financial conditions globally continue to weigh on the country’s economic activity. China’s government has already implemented measures to help support its economy while pledging to provide even more stimulus measures. Here’s a look at China’s business activity in January.

• The NBS Composite Purchasing Managers Index, which is a gauge for overall business activity, fell to 50.1 in January from 52.2 in the previous month. This marked the slowest growth in business activity since August 2024. Manufacturing activity contracted, while services sector activity slowed.
• Manufacturing activity contracted for the first time since September. New orders fell sharply, highlighting the impact of weak domestic demand. Output and buying activity also dropped over the month.
• A separate report showed that industrial profits in China fell by 3.3% in 2024 compared to the previous year. The decline was driven by a drop in profits at state-owned firms, which offset a small increase in profits in the private sector. This was the third straight yearly decline in industrial profits, hindered by weak demand and relatively high inflation.
• China’s economy appears to be on relatively shaky ground with the threat of tariffs looming. US President Donald Trump noted that he would prefer not to tariff China. Still, it remains a strong possibility amid discussions between the two countries on a variety of issues.

The world’s second-largest economy remains unsteady despite efforts from the government to stimulate economic activity in 2024. Now, markets are calling for more from the government, which noted in late 2024 that it is prepared to do just that. China’s economy might need even more support to help domestic conditions, with trade tensions brewing between the world’s two largest economies.

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