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Asia factories slack as trade war agonizes

Soft factory activity was seen from China, South Korea, Taiwan, Indonesia, and Malaysia, indicating a broad slowdown in factory activity throughout Asia.


Factories in Asia collectively felt their factory lines stagnate in October, the same month which saw some United States (US) tariffs on China take effect.

Soft factory purchasing managers’ index (PMI) numbers were seen from China, South Korea, Taiwan, Indonesia and Malaysia, indicating a broad slowdown in factory activity throughout the world’s largest and most populous continent.

South Korea’s Nikkei PMI fell from 51.3 points in September to 51 points last month while Indonesia’s PMI edged lower to 50.5 points.

Taiwan and Malaysia factories felt a larger slump in activity, with their PMIs reversing from expansion to enter into negative territory. Taiwan’s Nikkei PMI fell from 50.8 points in September to 48.7 points, while Malaysia’s Nikkei PMI reversed from an expansion of 51.5 points in September to contract at 49.2 points.

A lone bright spot could be seen from Japan’s Markit/Nikkei PMI which adjusted to 52.9 points for last month, higher than September’s 52.5 points, helped by a rebound in export sales.

China, the country that is directly involved in the trade spat with the US, saw its Caixin/Markit PMI stall at 50.1 points for last month, a slight increase from 50 points in September. Economists in a Reuters poll had expected the sector to fall to a contractionary reading of 49.9 points.

Official PMI numbers from China, which measures the performance of large enterprises pointed its manufacturing sector at a score of 50.2 points, a slowdown from 50.8 points in September.

The US and China have slapped tariffs on each other in an ongoing trade fight, with the US imposing about US$250 billion of duties on Chinese goods and China retaliating with US$110 billion on US items.

The International Monetary Fund have said that the trade war escalation would hit China harder than the US and have downgraded the country’s growth outlook for next year.

The US is said to be preparing to announce tariffs on all remaining Chinese imports by early December if upcoming talks between both presidents this month fail to ease the trade war tension.

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