Two surveys have suggested that China’s manufacturing sector improved or at least stabilized this month compared with the previous month, providing some respite following signs of a slowdown in the economy’s recovery.
China Beige Book, a US-based data provider, said its surveys showed that manufacturing output increased “notably” from last month, as did domestic and foreign orders.
Separately, Goldman Sachs Group Inc cited a pick up in the emerging industries purchasing managers’ index (PMI).
Photo: Reuters
“It’s still too early to put a nail in the coffin of the post-COVID Zero recovery,” China Beige Book said in a statement. “Manufacturing activity defied rumors of demise, though soft demand from Western economies remains a major headwind.”
Revenue and profit margins for Chinese manufacturers as well as the service and retail sectors also increased this month from the previous month, it said.
China Beige Book’s data was based on a survey of about 1,000 Chinese firms conducted between May 18 and Thursday last week.
Morgan Stanley chief China economist Robin Xing (邢自強) remained optimistic about China’s growth trajectory for the year despite the softer data last month.
“I would see recent April data weakness as a hiccup,” he said in an interview with Bloomberg TV, adding that the strength in services spending limited any need for additional stimulus.
“As we have witnessed in other Asian economies who didn’t use paychecks or fiscal transfers to jump-start the recovery, the recovery takes time because you need the service sector to recreate jobs,” he said.
China’s emerging industries PMI, which measures month-on-month changes in activity in sectors such as renewable energy, advanced manufacturing and biotechnology, showed an uptick this month compared with the previous month after seasonal adjustment, Goldman Sachs’s China economist Hui Shan (閃輝) said in a note.
The emerging industries PMI is widely seen as a leading indicator of China’s official manufacturing PMI, and the figures suggest “a tentative sign that manufacturing activity may begin to stabilize,” Hui added.
The official PMI is set to be released today.
The housing market remains a concern, with the China Beige Book survey finding weakness in the sector.
“Construction is continuing to struggle,” Shehzad Qazi, managing director of the survey company said in an interview on Bloomberg Radio. “The property market recovery remains incredibly uneven. Price growth rebounded from April, but sales slowed.”
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
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
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks