Asia Economic Resilience Seen in China Manufacturing Gauge, Japan Exports
By Bloomberg News - Oct 24, 2011
China’s manufacturing may expand in October for the first time in four months, snapping the longest contraction since 2009, after a preliminary index of purchasing managers showed a rebound in new orders and output.
The reading of 51.1 for the index released by HSBC Holdings Plc and Markit Economics today was the highest in five months and compares with the final reading of 49.9 for September and August. A reading above 50 indicates expansion.
The Chinese report, along with Japanese data today showing an increase in exports exceeding economists’ forecasts, signaled that Asia’s largest two economies are withstanding Europe’s sovereign debt crisis. Shares and currencies in the region advanced as the figures, and a plan by European leaders to contain the region’s financial woes, buoyed investor confidence.
“As long as Europe and the U.S. see very weak growth but not an outright recession, Asia in general and larger, more domestic-demand driven economies such as China, India and Indonesia in particular, should hold up,” said Louis Kuijs, Hong Kong-based chief Asia economist at MF Global Holdings Ltd., who previously worked in Beijing at the World Bank. “The PMI data today underlines just how well China’s industrial sector is holding up against the global slowdown.”
The MSCI Asia Pacific Index climbed 2.6 percent as of 5:19 p.m. in Tokyo. Stocks in China rallied after the data. The benchmark Shanghai Composite Index rose 2.3 percent to 2,370.33 at the 3 p.m. close. The gauge declined earlier after Premier Wen Jiabao signaled over the weekend that policy makers will maintain an anti-inflation monetary stance.
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