(Reuters) – Asia’s biggest manufacturing economies boosted activity in November, with Chinese factories extending their recovery partly boosted by stimulus from Beijing and surging exports, although weak changes elsewhere in the region pointed to some challenges.
Risks to global trade from Donald Trump’s second term as president loomed over factories as investors weighed a series of purchasing managers’ indexes (PMIs) released on Monday that painted a mixed picture for export-dependent Asian economies.
Factory activity in China expanded at the fastest pace in five months in November as new orders, including those from abroad, led to a solid rise in output, Caixin PMI showed.
That largely mirrored the modest expansion in manufacturing activity seen in an official survey released on Saturday, suggesting that a glimmer of stimulus had finally reached the world’s second-largest economy.
The improvement in China helped other Asian factories such as South Korea and Taiwan, where activity also picked up.
Xing Zhaopeng, ANZ’s senior China strategist, said China’s recovery was mainly driven by exports.
“Both new export orders in the official PMI and the Caixin PMI suggest buyers were rushing to place orders. But China’s domestic demand was still weak as the official non-manufacturing PMI stood at 50,” Xing said.
Many Chinese exporters are struggling to get their goods to major markets ahead of tariffs from the US and the European Union, which are among several risks policymakers must now face.
Beijing launched a series of major stimulus packages in the second half of this year to stem a sharp slowdown in consumption and production.
While analysts say more is still needed to sustain a stronger recovery, there are signs that this year’s measures have had some effect on retail spending and stabilizing the housing market.
Above these positive signs, however, is the threat to global trade posed by the tariffs proposed by US President-elect Trump, who enters the White House on January 20 next year.
Trump has promised aggressive tariffs on major US trading partners, particularly China, in an effort to revive American industry and employment.
Last week, he said he would impose 10 percent tariffs on Chinese goods to get Beijing to do more to stop the trade in chemicals used to make fentanyl, following his earlier threats of tariffs of more than 60 percent on Chinese goods.
Elsewhere in Asia, conditions worsened with Japan’s PMI reporting the fastest decline in activity in eight months as factories cut output due to weakening demand.
That was slightly offset by official data that showed Japanese corporate spending on plant and equipment accelerated in the third quarter.
In Southeast Asia, PMIs showed that factory activity extended the decline in Indonesia and Malaysia and slowed expansion in Thailand and Vietnam.
