Asia’s emerging economies appear to be slowing, with data yesterday showing manufacturing activity easing further last month as governments grapple with persistent inflation.
Figures from across the region showed a pullback, with purchasing managers’ indices (PMI) in India, China, Taiwan and South Korea all registering a drop.
In Australia, a 1.2 percent sequential contraction in GDP in the March quarter was waved away by government ministers as a weather-related blip, but it was still the sharpest fall in 20 years and added to the mood of a regional slowdown.
Photo: Reuters
China provided the most eagerly anticipated data of the day, with the HSBC China PMI falling to 51.6 last month from 51.8 in April.
The final reading was higher than preliminary data released by HSBC last month, which suggested the PMI had slipped to 51.1. That data triggered falls on the Shanghai and Hong Kong bourses amid fears of an economic slowdown.
A figure above 50 on the index indicates expansion in the sector, while one below 50 indicates contraction.
The gentle slowing will be welcome news for a country grappling with stubbornly high inflation and concerned about runaway growth.
With an eye on the unrest sweeping across the Middle East and North Africa, Beijing has sought to keep a lid on price rises, wary of their potential to cause unrest among the millions whose low incomes have little capacity to cope with increases in the cost of food and basic goods.
HSBC chief China economist Qu Hongbin (屈宏斌) played down concerns about a potential hard landing for the economy.
“This is still just a moderation rather than a meltdown in growth so there is no need to worry about overtightening,” Qu said. “Beijing is likely to keep tightening mainly through reserve ratio and rate hikes in the coming months.”
Manufacturing activity in India also expanded at a slower pace last month than the previous month, the seasonally adjusted HSBC PMI showed.
The index was at 57.5 last month, down from 58 in April. Inflation in India was a punishing 8.66 percent in April, down from the previous month, but still way above the government’s target of 5.5 percent.
Taiwan’s drop was more stark, with the HSBC PMI falling to 54.9 last month from 58.2 in April. However, the figure is still solidly expansionist.
However, in South Korea manufacturing growth dropped to its slowest pace in six months, with HSBC’s PMI falling to 51.2 from 51.7.
Core inflation hit a two-year high of 3.5 percent, while the trade surplus fell by half on easing exports. Together with disappointing industrial production on Tuesday, the data indicate declining momentum in Asia’s fourth-biggest economy.
“[South] Korea’s economy is clearly hitting a soft patch,” HSBC economist Frederic Neumann wrote in a research note.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained