Caterpillar Inc manufactures huge yellow bulldozers. Nvidia Corp makes minuscule computer chips. Their products have little in common, but their earnings on Monday pointed to the same direction: Demand in China is slowing down for a widening range of goods.
The world’s second-largest economy, which contributes about one-third of global growth, has been weakening for years after averaging more than 10 percent growth for three decades through 2010.
The pace of expansion cooled to 6.6 percent last year, the slowest since 1990, while retail sales grew 9 percent, the least since 2003.
Since Apple Inc early this month shook investors with a warning, a picture is starting to emerge on where the tempering of the US$12.2 trillion economy is to hurt in the coming year.
It includes Stanley Black & Decker Inc’s tools, PPG Industries Inc’s automotive coatings, Intel Corp’s processors and Trinseo SA’s synthetic rubber tires.
Nvidia and Caterpillar are the latest examples of this anecdotal evidence. Here is a rundown of what we have heard so far from US, European and Asian businesses:
Caterpillar, an industry bellwether, on Monday sent a gloomy signal when it posted its biggest quarterly profit shortfall in a decade, and provided a yearly forecast that trailed some of Wall Street’s estimates.
Sales of excavators are to be flat year-on-year in China, the Deerfield, Illinois-based company said.
Shares of Japanese rivals Komatsu Ltd and Hitachi Construction Machinery Co each lost more than 4 percent in Tokyo yesterday. In China, Sany Heavy Industry Co (三一重工) and other heavy equipment makers fell.
Stanley Black & Decker CEO Jim Loree was not shy about raising the alarm bells on China last week, saying it was facing slowing economic growth there, along with most of the rest of the world.
The previous week, paint maker PPG talked about “sluggish industrial activity in China” among pressures that the company would hit the first half of the year.
Santa Clara, California-based Intel Corp, whose processors are the main component in most of the world’s personal computers and servers, cited softness in China among the reasons for its lower-than-expected full-year forecast last week.
Nvidia, the biggest maker of chips for computer graphics cards, on Monday echoed those comments, saying that “deteriorating macroeconomic conditions, particularly in China, impacted consumer demand” for its products.
Nidec Corp, a Japanese maker of precision motors used in computer drives, cut its profit outlook by 26 percent for the year ending on March 31, blaming it on the US-China trade war. It reported a 43 percent drop in operating profit for the quarter through last month.
Samsung Electronics Co’s quarterly profit and revenue missed estimates on sputtering demand for memory chips during the last three months of last year, the same period Apple saw anemic sales in China.
The South Korean company has been losing share for its smartphones for years in China, but the slowdown there is now threatening to hurt its crucial chips business.
Yesterday in Japan, Alps Alpine Co, a supplier of electronic parts to automakers and Apple, cut its operating profit forecast for the year by 24 percent, blaming the US-China trade dispute and Brexit.
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
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
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last