China’s manufacturing growth dropped last month to its lowest level of last year, an official survey released yesterday showed, as the sector struggles with weak domestic demand.
China’s official Purchasing Managers’ Index (PMI) released by the National Bureau of Statistics was 50.1 last month, down from 50.3 recorded in November.
The index, which tracks activity in factories and workshops, is considered a key indicator of the health of China’s economy. A figure above 50 indicates expansion, while anything below signals contraction.
Photo: AFP
“Growth momentum is still insufficient,” the bureau said in a statement.
British bank HSBC said on Wednesday that its PMI figure for the month fell to 49.6, down from the breakeven point of 50 in November.
The HSBC survey focuses on smaller companies, which are facing greater strains, notably higher financing costs and problems getting loans, while China’s official survey looks more at larger, state-owned firms, which have been more resilient to the protracted downturn, partly due to generous government subsidies and better access to credit.
“The decline of both official and HSBC PMIs suggests that China’s manufacturing sector, especially those industries related to property market, is still struggling due to sluggish domestic demand,” ANZ Research economists Liu Li-gang (劉利剛) and Zhou Hao (周浩) said in a note. However, some data suggest that “real activity indicators should have accelerated in the last month of 2014, supported by proactive fiscal policy.”
China’s central bank surprised economists in November by cutting benchmark interest rates for the first time in more than two years, in a move interpreted as an attempt to shore up flagging growth.
The People’s Bank of China also injected more funds into the banking system in recent months and relaxed restrictions to persuade risk-averse banks to lend more.
In addition, the economic planing agency has approved more infrastructure projects.
While its recent moves might have bought the central bank some time to see if conditions improve, many economists still expect more interest rate cuts as well as reductions in banks’ required reserve ratios this year, perhaps as soon as the first quarter.
The world’s second-largest economy looks set to start the new year on a weak note, reinforcing expectations that Beijing plans to roll out more stimulus measures to avert a sharper slowdown which could trigger job losses and debt defaults.
A property slump is expected to last well into this year, companies are set to continue struggling to pay off debt and export demand might remain erratic, leaving only the services sector as a bright spot in the economy.
Additional reporting by Reuters
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