Solid demand for technology goods drove extended growth in Asia’s factories last month, but a slowdown in China underscored the challenges facing the region as it seeks a sustainable recovery from the shattering COVID-19 pandemic blow.
The vaccine rollouts globally and a pickup in demand provided optimism for a vast number of businesses that had grappled for months with a cash flow crunch and falling profits.
In Japan, manufacturing activity expanded at the fastest pace in more than two years, while South Korea’s exports rose for a fourth straight month last month, suggesting the region’s export-reliant economies were benefiting from robust global trade.
Photo: AP
On the flip side, China’s factory activity grew at the slowest pace in nine months, hit by a domestic flareup of COVID-19 and soft demand from countries under renewed lockdown measures.
“In all, the softer pace of activity in today’s [Chinese] manufacturing print is likely to be temporary, and we expect the growth momentum to pick up on the back of a broadening out of the domestic demand recovery and a pickup in global demand,” HSBC Holdings PLC economist Erin Xin said.
“However, household consumption, while recovering, has not yet fully reached pre-pandemic levels of growth, due to continued labor market pressure,” Xin said.
China was the first major economy to lead the recovery from the COVID-19 shock, so any signs of prolonged cooling in Asia’s engine of growth would likely be a cause for concern.
However, with the global rebound still in early days, analysts said the outlook was brightening as companies increased output to restock inventory on hopes vaccine rollouts would normalize economic activity.
“The recovery in durable-goods demand is continuing, which is creating a positive cycle for manufacturers in Asia,” said Shigeto Nagai, head of Japan economics as Oxford Economics.
“As vaccine rollouts ease uncertainties over the outlook, capital expenditure will gradually pick up. That will benefit Japan, which is strong in exports of capital goods,” he said.
China’s Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) last month fell to 50.9, the lowest level since May last year, but still above the 50-mark that separates growth from contraction.
That was in line with official manufacturing PMI that showed that factory activity in the world’s second-largest economy expanded at the weakest pace since May last year.
Activity in other Asian giants remained brisk.
The final au Jibun Bank Japan Manufacturing PMI jumped to 51.4 from the prior month’s 49.8 reading, marking the fastest expansion since December 2018, data showed yesterday.
In South Korea, a regional exports bellwether, shipments last month jumped 9.5 percent from a year earlier for its fourth straight month of increase on continued growth in memory chip and vehicle sales.
India’s factory activity expanded for the seventh straight month on strong demand and increased output, although a spike in input costs could weigh on corporate profits ahead.
The Philippines, Indonesia and Vietnam also saw manufacturing activity expand, a sign that the region was gradually recovering from the initial hit of the pandemic.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary