China’s manufacturing contracted again last month, but improved from the previous month in a possible sign an economic slowdown is bottoming out.
An industry group, the China Federation of Logistics and Purchasing, said yesterday its monthly purchasing managers’ index (PMI) stood at 49.8 points on a 100-point scale on which numbers below 50 indicate a contraction. That was up 0.6 points from August’s numbers and the first improvement in four months.
The data added to signs China’s deepest economic downturn since the 2008 global crisis might be stabilizing, but officials — including Chinese President Hu Jintao (胡錦濤) — have warned conditions might deteriorate further before growth rebounds.
China’s economic growth fell to a three-year low of 7.6 percent in the quarter ending in June. That is strong by Western standards, but has hurt Chinese manufacturers and construction companies that depend on high growth.
Analysts are forecasting a turnaround late this year or early next year, but have pushed back their time frame due to weakness in key European and US export markets. They say a Chinese recovery is likely to be too weak to drive a global rebound without improvement in developed economies.
Some forecasters point to higher bank lending in recent months as a sign of an impending uptick in growth, but other indicators have yet to show improvement.
A separate PMI released on Saturday by HSBC Corp showed activity rose slightly to 47.9 on a similar 100-point scale, still showing a contraction, but improved from August’s 47.6.
China’s slowdown is largely due to government lending and investment curbs imposed to cool inflation and steer rapid growth to a more manageable level, but the country has also been hurt by the unexpectedly sharp decline in export demand.
The government has cut interest rates twice since June and is pumping money into the economy through higher investment by state companies and more spending on building subways and other public works. However, authorities are moving more cautiously than they did after the 2008 crisis, when the huge stimulus that helped China rebound also fueled inflation and a wasteful building boom.
The logistics federation said the production component of its index improved to 51.3, up 0.4 points from August. It said clothing, auto manufacturing, food processing, electronics and some other industries showed activity expanding. Steel production, metal fabrication and equipment manufacturing contracted.
New export orders rose 2.2 points from August’s level to 48.8, though that still showed a contraction.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
Swancor Renewable Energy Co (上緯新能源) yesterday announced plans for a 4.4 gigawatt (GW) offshore wind project off Miaoli County as part of its commitment toward Taiwan’s energy transformation, the company said in a statement. The “Formosa 4” project includes three deep-water wind farms 18km to 20km off the coast, Swancor Renewable CEO Lucas Lin (林雍堯) said, adding that planning for the project began last year. A proposal for Formosa 4 was this week submitted to the Environmental Protection Agency (EPA), the company said. Swancor Renewable jointly developed the Formosa 1 project, a 128 megawatt (MW) wind farm about 4km off Miaoli and the
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,