Factory hubs in Asia stuck in doldrums as China-US trade stalls
DESPITE anticipation that the US and China may reach an interim trade agreement, factory hubs in Asia are not seeing an improvement in activity, reports Bloomberg
DESPITE anticipation that the US and China may reach an interim trade agreement, factory hubs in Asia are not seeing an improvement in activity, reports Bloomberg.
Purchasing manager indexes for South Korea, Japan, Malaysia and Indonesia remained in contraction while Taiwan also dipped below 50. Even Vietnam, which has been more resilient than many of its peers, dropped to the dividing line, reported Bloomberg.
Thailand joined Vietnam at 50, having hovered over the dividing line most of the year.
China's Caixin index - which is more weighted towards private manufacturing companies - rose to 51.7 from 51.4, but an official gauge published at the end of October fell to its lowest level since February.
'The headwinds for global growth, including China, continue to be a challenge,' said Citigroup economist Johanna Chua.
The ongoing slowdown comes against a backdrop of the slowest global growth in a decade, as mounting protectionism and slowing demand dampens business confidence across Asia.
South Korean exports dived again in October. Shipments declined by 15 per cent year on year, dragged down by a slide in semiconductor and petrochemical shipments. Imports also decreased by 15 per cent.
Much hinges on how the US-China trade talks will play out. The two governments had both announced progress towards an initial agreement to be inked at the Asia-Pacific Economic Cooperation summit, however, Chile's decision to cancel the event amid widespread protests and riots has raised doubts over the timing of a deal.
US President Donald Trump said officials are looking for a new location for him and Chinese President Xi Jinping to sign the deal, which he said would be 'about 60 per cent of total deal.' At the same time, Chinese officials are casting doubts about reaching a comprehensive agreement.