China’s manufacturing growth slowed last month for the first time in six months, official figures showed yesterday, suggesting the world’s second-largest economy faced headwinds at the end of last year.
The purchasing managers’ index (PMI) was at 51, down from November’s 51.4, the Chinese National Bureau of Statistics said on its Web site. A reading above 50 signals expansion while a figure below indicates contraction. It marked the 15th straight month of growth but it is the first time the figure has dipped from the previous month since June last year.
“The fall in the weaker-than-expected official PMI reinforces our view that growth momentum entered a downtrend” in the fourth quarter from a peak in the third, Nomura International analysts said in a research note.
British bank HSBC last month said China’s manufacturing activity last month expanded at its slowest rate in three months, in its preliminary PMI index.
The bank’s final PMI reading for last month is scheduled to be released on Tuesday.
China’s economy, an important driver of regional and global growth, expanded 7.8 percent from July to September last year, snapping two quarters of slowing, but analysts warn vulnerabilities remain.
Last month’s PMI indicates “that real activity could have slowed in the month due to continued liquidity tightness,” ANZ bank economists Liu Li-Gang (劉利剛) and Zhou Hao (周浩) wrote in a separate note.
A government report cited by state media last week suggested China’s economy grew 7.6 percent last year, slightly above its official target for the year and just below the 7.7 percent expansion in GDP in 2012 — the worst growth rate for 13 years.
Liu and Zhou maintained their forecast that China’s economic growth may have slowed to as low as 7.5 percent in the fourth quarter while expecting a figure of 7.6 percent for all of last year.
The Nomura analysts — Zhang Zhiwei (張智威), Hua Changchun (花長春) and Wendy Chen (陳家瑤) — expect economic growth to slow to 7.6 percent in the fourth quarter before weakening further to 7.5 percent in the first three months of this year and 7.1 percent in the April-June period.
“We remain concerned about the sustainability of investment by local government financing vehicles and property developers given elevated interest rates,” they added.
China on Monday announced that liabilities carried by local governments ballooned to 17.9 trillion yuan (US$2.95 trillion) as of the end of June last year.
The figure was included in the results of a long-awaited nationwide debt probe by the National Audit Office and compared with 10.7 trillion yuan as of the end of 2010 — an increase of 67 percent.
Local authorities have long used debt to fuel growth in their regions, often by pursuing projects that are not economically viable or sustainable. The burgeoning liabilities at the local level have raised concerns of a potential drag on its economy unless steps are taken to rein them in.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the