(Reuters) – Asia’s biggest manufacturing economy ramped up activity in November, with Chinese factories extending a recovery helped in part by Beijing’s stimulus and an export boom, but elsewhere in the region Weak areas presented some challenges.
Risks to global trade from the inauguration of Donald Trump’s second term loom large for factories, with Asia’s export-dependent economies looming large as investors weigh a series of Purchasing Managers’ Indexes (PMIs) released on Monday. It depicts a complicated situation.
China’s factory activity expanded at the fastest pace in five months in November as new orders, including those from overseas, led to a solid increase in production, according to the Caixin Purchasing Managers’ Index (PMI).
This is broadly in line with the modest expansion in manufacturing activity seen in an official survey released on Saturday, suggesting that the blitz of stimulus is finally making its way into the world’s second-largest economy. are.
China’s improvements have also provided a tailwind to other Asian manufacturing powers such as South Korea and Taiwan, and production activity has increased there as well.
Xin Zhaopeng, senior China strategist at ANZ, said China’s recovery was largely export-led.
“Both the official PMI and Caixin PMI for new export orders suggest that buyers are rushing to place orders,” Xing said. “However, with the official non-manufacturing PMI at 50, China’s domestic demand remained weak.”
Many Chinese exporters are scrambling to get goods to key markets in the face of tariffs from the United States and the European Union, one of several risks that policymakers must now contend with. are.
The Chinese government launched a series of large-scale economic stimulus measures in the second half of this year to halt a sharp slowdown in spending and production.
Analysts say more is still needed to sustain a stronger recovery, but there are signs that this year’s measures are having some effect, including stabilizing retail spending and the real estate market.
But overshadowing these positive signs is the threat to global trade posed by President-elect Donald Trump’s tariff proposals, which he will enter the White House on January 20 next year.
President Trump has promised to impose aggressive tariffs on America’s major trading partners, particularly China, in an effort to revive American industry and jobs.
Last week, he imposed a 10% tariff on Chinese goods to force Beijing to do more to stop the trafficking of chemicals used to make fentanyl, following an earlier threat to impose tariffs of more than 60% on Chinese goods. said.
The situation worsened elsewhere in Asia, with Japan’s PMI showing the slowest decline in activity in eight months as factories cut production in response to weaker demand.
This was offset somewhat by official data showing that Japanese companies’ capital spending accelerated in the third quarter.
In Southeast Asia, PMI showed factory activity widening its decline in Indonesia and Malaysia, and slowing expansion in Thailand and Vietnam.
