Chinese Manufacturing Contracting, Industrial Production Slowing As Global Demand Weakens

Based on PMI surveys, manufacturing, which accounts for 40% of China's GDP, has been in contraction for at least six months as external demand for Chinese goods falls and domestic demand is depressed by the decline in housing prices and construction sector

Industrial production growth is the slowest in a decade (5.7%) and electricity demand, a key proxy for output, contracted in Q4 2008. Chinese manufacturing continues to contract, albeit at a slightly less sharp pace since November 2008 and is now shedding record jobs