Factory activity last month contracted sharply across most of Asia as the COVID-19 pandemic paralyzed economic activity across the globe, with sharp falls in export power houses Japan and South Korea overshadowing a modest improvement in China.
Manufacturing gauges also tumbled in Indonesia, Vietnam and the Philippines, according to various purchasing managers’ index (PMI) surveys released yesterday, underscoring the widening damage brought by the pandemic that has infected more than 873,000 people, upended supply chains and led to city lockdowns worldwide.
RISE IN CHINA
Photo: AFP
China’s Caixin/Markit manufacturing PMI rose to 50.1 from February’s record low of 40.3, and just a notch above the 50-mark that separates growth from contraction, but growth was marginal, highlighting the intense pressure facing businesses as domestic and export demand slumps.
South Korea’s IHS Markit PMI plunged to 44.2, its lowest since January 2009, as many of its trading partners imposed dramatic measures to curb the virus’ spread. The index was 48.7 in February.
Japan’s PMI fell to a seasonally adjusted 44.8 from a reading of 47.8 in February, its lowest since April 2009, adding to views that the world’s third-largest economy is likely already in recession.
CALL FOR STIMULUS
Japan’s ruling coalition has called on the government to secure a stimulus package worth at least ￥60 trillion (US$553 billion), with ￥20 trillion in direct spending.
Elsewhere in Asia, the pain was felt acutely, with the Philippines dropping to 39.7, the lowest since records began in 2016 and Vietnam slipping to 41.9, while Taiwan’s PMI rose above 50.
“Things are likely to get a lot worse in the months ahead,” Capital Economics Ltd economist Alex Holmes said in a note to clients, adding that the survey period for the PMIs likely did not capture more recent lockdowns such as those in Malaysia and Thailand.
The consultancy expects global GDP to fall by more than 3 percent this year.
Policymakers across the globe, including in Asia, have announced massive monetary and fiscal stimulus measures to try to mitigate the economic fallout from the pandemic, keep cash-starved businesses afloat and save jobs.
However, many measures have been short-gap steps to deal with the immediate damage to corporate funding and shore up banking systems amid worries of a credit crisis.
‘MASSIVE’ SPENDING
The IMF has said the pandemic was already driving the global economy into recession, calling on countries to respond with “very massive” spending to avoid bankruptcies and emerging market debt defaults.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS