What’s going on here? Data out on Monday showed that China’s factories moved at their slowest pace since last August this month, and it’ll take more than fuzzy socks to shake off that winter lethargy. What does this mean? China’s manufacturing purchasing managers’ index (PMI) acts as the economy’s first official health check each month. And this time, it looks like it needs the financial equivalent of a vitamin drop – stat. The reading of 49.1 indicated that factory activity was in decline after three months of much-needed growth. Now, the government did manage to temporarily perk the economy up a little at the end of last year. But with deflation, potential tariffs, and sliding company profits to tackle, it’ll take more than those half-hearted measures to bring about any sustained momentum. Why should I care? For markets: So much for hot commodities. Factories across the country might be noticing the odd tumbleweed, but it’s China’s commodity producers bearing the brunt of the slowdown. Oil refiners racked up eye-watering losses to land at the – ahem – bottom of the barrel last year, while steelmakers and coal miners both saw profit dwindle. It doesn’t look like these industrial giants will catch a break anytime soon, either. Prices are falling across the board and the supply of commodities is overshadowing demand, while green energy policies are threatening their staying power in the long term. The bigger picture: Investors are playing favorites. Investors haven’t ditched China yet, though they are becoming more selective. Hefty state-owned, dividend-paying companies have been a crowd favorite lately, along with budget-friendly brands and ecommerce platforms – the latter being due to a shift in money-conscious shoppers’ spending habits. And let’s not forget about tech firms. Ones that are less vulnerable to US tariffs have been the most popular, as well as those tied to China’s push to become self-reliant. | 
