A Commerzbank economic research report highlights the ongoing difficulties facing the Chinese economy, with both the manufacturing and services sectors slipping into contraction. Official purchasing managers' indices for January 2026 point to a weak start to the year, with GDP growth expected to slow to 4.0% in 2026. The report emphasizes the need for the government in Beijing to implement further economic stimulus measures.

 

Weak economic indicators point to challenges

“China’s official January 2026 Purchasing Managers’ Index (PMI) was worse than expected, suggesting a weak start to the new year. Both the manufacturing and services sectors unexpectedly slipped into contraction territory (values ​​below 50).”

We expect GDP growth to slow to 4.0% in 2026 (compared to 5.0% in 2025). The weak January figures increase pressure on the government in Beijing to implement further economic stimulus measures.

Interestingly, RatingDog’s manufacturing PMI (which includes surveys of small, export-oriented private companies) rose slightly from 50.1 to 50.3. This suggests that large, state-owned enterprises, in particular, are suffering from weak domestic demand, while the export sector is showing some resilience.