China manufacturing growth slows

Manufacturing activity in China slowed slightly in December, official figures showed Sunday, as the world's second largest economy stabilises.

The official purchasing managers' index (PMI), which gauges conditions at factories and mines, came in at 51.4 in December, down from 51.7 the previous month which marked its fastest growth for two years.

A figure above 50 marks an expansion of manufacturing activity, and below 50 a contraction. Analysts surveyed by Bloomberg had expected an average of 51.5 for December.

The key manufacturing sector had been struggling in the face of sagging world demand for Chinese products and excess industrial capacity left over from the country's infrastructure boom.

But an upturn in the housing and construction markets thanks to cheap credit -- following a series of monetary easing measures -- has contributed to a sharp rebound in manufacturing activity.

However, an alternative index calculated independently by the research firm Caixin Insight Group, which focuses on small and medium-sized companies, shows a sharp decline in growth in recent months.

Its assessment for December will be published next week.

It is mainly large groups that have so far benefited from the government's fiscal stimulus, notably through tax cuts and increased public spending on infrastructure.

China is a vital driver of global growth, but its economy expanded only 6.9 percent in 2015 -- its weakest rate in a quarter of a century -- and is predicted to have slowed further last year.

Beijing has said it wants to reorient the economy away from relying on debt-fuelled investment and towards a consumer-driven model, but the transition has proven challenging.