China’s manufacturing activity slumped to its lowest level in 32 months this month, banking giant HSBC PLC said yesterday, renewing fears the Asian powerhouse is losing steam amid global economic woes.
The news comes just days after Chinese Vice Premier Wang Qishan (王歧山), China’s top finance official, gave a dire warning that the global recession was here to stay and it would impact the export-dependent economy because of weakening external demand.
The preliminary HSBC purchasing managers’ index (PMI) dropped to 48 this month — the lowest since March 2009 — compared with 51 in the previous month, HSBC said in a statement.
Photo: AFP
A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction. The final figure will be released on Dec. 1.
HSBC chief China economist Qu Hongbin (屈宏斌) said he expected cooling domestic demand, while weakening external demand for China’s exports heralded a further slowdown in production in the coming months.
However, he said China had more room to ease its tight monetary policy to boost a slowing domestic economy, as inflation was now in check.
Beijing, anxious about high inflation, has pulled on a variety of levers to curb price rises in the past year, including restricting the amount of money banks can lend and hiking interest rates.
The measures appear to have worked, as the nation’s inflation slowed sharply last month, with the consumer price index rising 5.5 percent year-on-year, the slowest pace since May, as food prices fell.
“It will leave more room for Beijing to step up selective easing measures, which should gradually filter through to keep China on track for a soft landing,” Qu said in the statement.
China’s economic growth eased to 9.1 percent in the third quarter from 9.5 percent in the second quarter, as government efforts to tame inflation and economic turbulence in Europe and the US curbed activity.
Wang warned over the weekend that China needed to fix “structural problems” in its financial system to cope with a “long-term” global downturn that threatens the world’s second-largest economy.
“For an economy like China that depends heavily on exports, the key is to understand the situation and put one’s own house in order,” Xinhua news agency quoted him as saying on Saturday.
Chinese leaders are trying to shift the country away from exports in favor of greater domestic consumption as the main engine of economic growth.
Liu Hongke, a Beijing-based economist at investment bank CCB International, said the latest PMI would boost the case for monetary easing, such as trimming reserve requirements for banks — the funds they must put aside as reserves.
“This may speed up the loosening of monetary policy,” he said.
China’s central bank has said in recent weeks it aims to tweak monetary policy by funding sectors in need, such as small enterprises and low-cost housing.
Chinese stocks closed down 0.73 percent yesterday after the PMI figures sparked renewed concerns of a domestic economic slowdown, although hopes of monetary easing offered support, dealers said.
“The market didn’t fall a lot on the data, but turnover remained low,” said Wu Dazhong, an analyst at Shenyin Wanguo Securities.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last