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China's PMI manufacturing came less than forecasts amid concerns about withdrawing stimulus measures

Tue, Dec 1 2009, 02:37 GMT
by ecPulse.com analysis team

ecPulse.com

A report today showed China's PMI manufacturing coming less than forecasts after fears increased in global markets from withdrawing stimulus measures, which is pressuring companies to cut spending and reduce demand. Chinese manufacturers are waiting for a clear outlook for the global economy after reducing stimulus spending, and then expansion plans could be resumed or could be delayed for more time.

China's PMI manufacturing remained at 55.2 in November which is the same prior reading and it came less than forecasts that referred to 55.9, having in mind that the index recorded 38.8 in the same period last year, after the financial crisis hit global demand.

Today's report showed that output inclined to 59.4 in November compared with 59.3 in October, while new orders came in at 58.4 versus 58.5 in October. New export orders declined to 53.6 from 54.5 indicating a decline in global demand amid concerns about the strength of economic recovery after stimulus measures are withdrawn.

The Chinese industrial production showed much progress over the past few months and it rebounded 16.1 in September from 13.9 in August. This came alongside recovering demand as China's main trade partners are emerging from recession. Thus, the manufacturing sector helped the world's third largest economy to expand 8.9% in the third quarter.

Yet, growth witnessed in the Chinese manufacturing sector may slow amid concerns about an absence of governments' aids that may force global markets to hold and wait for more signs of recovery from major economies after stimulus spending is reduced.

However, the communist party said last week that China will maintain its monetary fiscal policies adopted since last year to face the negative effect of the global recession, while Premier Wen Jiabao called yesterday in the China European union summit for China and Europe to hold the intensity of stimulus measures to guarantee a solid recovery.

Moving to South Korea's trade balance surplus that widened to $4100 million in November compared with $3631 million in October, as the nation's exports gained 18.8% in November from a year earlier following a decline by 8.5%, while forecasts referred to 22.8%. Exports recorded $34300 million during November versus $33957 million in October.

South Korea's imports inclined 4.7% in November from a year ago compared with a previous decline by 16.0%, while it was expected to climb 8.6%. The nation's imports recorded $30200 million from $30326 million in October.

Recovery witnessed in the exports sector helped Asia's fourth largest economy to grow 2.9% in the third quarter, the fastest pace in seven years, worth mentioning that exports account for more than half of the South Korean economy.

Meanwhile, The Korean government expected exports to incline 13% next year recording $410 billion as demand for semiconductors and cars is increasing, while imports are anticipated to rise 21% recording $390 billion. On the other hand, the South Korean President Lee Myung Bak said the nation's gross domestic product will expand about 5% next year.

Published on  Tue, Dec 1 2009, 02:38 GMT