Chinese manufacturing contracts

Beijing - Factory production contracted in China for the first time in seven months, according to a survey released Tuesday.

The preliminary purchasing managers index for the manufacturing sector by financial services company HSBC showed a fall to a seven-month low of 49.5 from 50 in November.

At under 50 on a 100-point scale, the HSBC gauge indicated contraction in the key sector.

The flash index is based on approximately 85-90 per cent of survey responses and is released in advance of the release of final figures on January 2, which can vary.

Hongbin Qu, chief China economist at HSBC said: "The manufacturing slowdown continues in December and points to a weak ending for 2014. The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months."

A decline in factory production would be the latest in a string of data indicating a downturn in the Chinese economy.

China's consumer inflation eased to 1.4% year-on-year in November, the lowest since 2009, the National Bureau of Statistics said last week.

China's central bank cut interest rates November 22 to boost the economy.