Asian Manufacturing Activity Growth Showed Further Signs of Weakness
Escalation of the US-China trade war caused weakening of factory growth of the Asian countries in September. Rising trade protectionism is expected to deal the world economy a relatively modest blow to this year, risks will intensify in 2019, as tougher US tariffs kick in and global borrowing costs rise. Last week, the United States and China imposed fresh tariffs on each other's goods, worth $200b and $60b, respectively.
The recent manufacturing surveys showed, that manufacturing activity weakened in Vietnam and Indonesia last month, while Taiwan's factories grew at the slowest pace in more than two years. Still, manufacturing indicators of Japan and South Korea remain relatively stable.
The growth in industrial production in China slowed in September more sharply than expected, as US trade tariffs begin to deal a heavy blow to the world's second-largest economy. The official China PMI manufacturing, published by the National Bureau of Statistics, fell to 50.8 in September from 51.3 in August. Economists predicted a decline in the figure only to 51.2. The indicator marked a 7-month low.
Released over the weekend, China Caixin PMI manufacturing dropped to 50.0, down from 50.6. That’s the fourth straight monthly drop.