China’s factory activity continues to deteriorate, widening the gap even further between the manufacturing and services sector amid the ongoing emphasis on transitioning the economy. The Chinese Logistics Information Center reported that January’s Manufacturing Purchasing Manager’s Index continued to contract, dropping even further since December’s 49.7, reporting a value of 49.4 and underlining 6th consecutive month of declines. The Caixin Manufacturing PMI, reported by Markit, showed a slight improvement to 48.4 for January compared to 48.2 for December, but still below the expansion threshold sitting at the 50 mark. Economists warn that manufacturing activity will continue to decline shrink over the coming year as a result of a global economic downturn and softer trade fundamentals. A focus on emissions and transitioning towards the services and consumption oriented economy will also continue to detract from manufacturing over the long-term.