Factory activity in China decreases as worries about slowing increase

The activity of Chinese factories has contracted for the second consecutive month in January, revealed the official index of Purchasing Managers (PMI).

The index rose to 49.5, but remained below the 50-point level that separates growth from contraction.

China has announced its weakest economic expansion for 28 years in 2018 and this growth is expected to slow further.

Already, a number of multinationals have said that China's sluggish growth has affected their bottom line.

Manufacturing data increased slightly from 49.4 in December.

Marcel Thieliant, economist at Capital Economics, said that if the PMI index did not weaken further in January, "it still suggests that the economy has lost strength early in the year" .

Other data, such as consumer confidence and retail sales figures, also indicate a weakening of demand in the world's second-largest economy.

Several international companies have warned against the slowdown in China, including Apple.

The tech giant has charged a 5% drop in revenue to China.

The shares of giant Caterpillar industrial equipment were defeated earlier this week, after the company announced that its sales had dropped 4%, mainly due to weak sales in China.

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Nvidia chip maker also announced weaker sales due to the sluggishness of the Chinese market.

3M, which manufactures products ranging from adhesive tapes to air filters, also said that weak customer demand in China affected its results.

China is trying to reform its economy to rely more on domestic consumption than on exports and investment to fuel growth.

The trade war between the United States and China also creates economic uncertainty.

The latest figures come as officials from both sides meet in Washington to try to ease trade tensions.

If the two sides fail to reach an agreement before March 1, the United States announced that it would increase the tariff rate from 10% to 25% on Chinese products by an estimated value $ 200 billion (£ 154.4 billion).