China manufacturing

Chinese steel mills were suffering a medley of woes in mid-March as sales slowed, production levels slumped and profits plunged, according to an investment bank survey published on Tuesday that foreshadows the rising risk of debt defaults in the world’s largest steel producer.

Macquarie Commodities Research, quoting a proprietary survey of Chinese steel mills and traders conducted in mid-March, found that large, medium and small steel mills were all enduring a contraction in orders compared to the same period in February, and profits had declined to historic lows. Continue reading »

How are China’s manufacturers feeling? Ending the year on a bit of a downer it seems, if HSBC’s Flash PMI is anything to go by.

The reading came in at 50.4, just above the 50-mark that separates contraction and expansion, and pointing to a three-month low. Clear evidence of a cooling in the manufacturing sector? Certainly, if the early reading is a reliable gauge. However, the flash reading is proving to be quite a volatile guide to the final PMI figure. Continue reading »

Last week’s “flash” estimate for China’s manufacturing sector turned out to be deeply wrong.

The HSBC/Markit survey of the sector came in well below forecasts this morning at 50.2, a full point below the estimate posted last week. Continue reading »

By Sammy Suzuki of AllianceBernstein

China has been an incredible engine of manufactured exports over the past decade and the central player of the Brics era. But mounting competition from other countries is gradually pulling production away from China. How should investors proceed? Continue reading »

When it comes to manufacturing indices, China is the big one. The question is which index to look at: the official state figures, or the widely-used HSBC/Markit index? They can often show different results.

For March, it’s relatively good news whichever index you pick. Official figures? Up, at 50.9. (50 is the mark that separates expansion from contraction), rising from 50.1 in February. HSBC/Markit? Up, at 51.6, higher than February’s 50.4. Continue reading »

Repatriating manufacturing back from China isn’t only a phenomenon of developed western markets.

Taiwan is home to many of the companies that helped build the Chinese contract manufacturing model and which continue to pour billions into the mainland. Yet Taipei, too, has been rolling out ambitious plans to bring those manufacturers back home. Will it work? Maybe. But as one economist points out, an equally interesting area to track is how Taiwanese companies are changing the way they invest into China. Continue reading »

On Wednesday, the streets of India will be filled with men and women, boys and girls, flinging multi-coloured powder and water over one another as they celebrate the beginning of spring. The festival of Holi will end with stained carpets and hot baths, as people return home to spend time with loved ones – and probably drink bhang, a traditional brew brimming with cannabis.

It is a distinctively Indian sort of mayhem. Doesn’t sound like something the straight-laced Chinese could get involved with, does it? It is, though. Continue reading »

What to make of Monday’s China flash purchasing managers index from HSBC, given the distorting impact of the Chinese New Year holiday?

With a reading of 50.4 (just above the 50 threshold that separates contraction and expansion), there’s something in it for bulls and bears alike. Continue reading »

Long assailed for running a massive trade surplus with the US, China has come out as the big winner from a new method for calculating global trade flows. When “value added” production is factored in, China’s surplus vis-à-vis the US shrinks by 25 per cent, according to the World Trade Organisation and the Organisation for Economic Cooperation and Development.

These are important findings that Beijing will no doubt cite the next time it wants to repel foreign criticism of its export and currency policies. But the calculations also give rise to a knock-on question: could China’s surplus prove to be stickier precisely because it still has a ways to go up the value chain? Continue reading »

Chinese manufacturing: workers on the road, Dec 2012There are further signs that the recovery in China’s manufacturing sector is taking hold, even if Santa Claus hasn’t been ordering an awful lot from China this year.

December’s flash HSBC/Markit China purchasing managers’ index stood at 50.9, a 14-month high and an improvement from November’s 50.5. A sub-index for new orders also rose for the fifth month to 52.7, the highest level since April 2011. Continue reading »

China’s flash PMI – released on Thursday by HSBC – marked a small, but key moment in China’s recent economic narrative. For the first time in over a year, the gauge showed expansion in the manufacturing sector with a reading of 50.4.

It follows promising October data for trade, retail sales and investment. China’s official PMI already showed expansion in the sector last month. Continue reading »

Assigning letters to economic trajectories was very much in vogue back in 2009. Would recoveries be ‘V’, ‘W’ or ‘L’ shaped? Now the craze seems to be coming to China.

October’s official PMI data showed that China’s factories are back to growth – just. But analysts disagree about whether this points to a big turnaround. Continue reading »

Does Chinese industry need more inflation?

The question might seem absurd for a fast-growing developing economy but with consumer prices increasing at just two per cent, Gavekal Dragonomics, the China economic research consultancy, is arguing that inflation is “more a friend than a foe.” Continue reading »

A few years ago, anyone seriously trying to suggest that Mexico had the edge on China in the realm of manufacturing exports would probably have been ridiculed and then invited to keep all future arguments strictly to themselves.

But since 2010, a growing number of academics, trade experts, bankers and economists has begun to entertain the once seemingly-implausible idea that Mexico is actually holding its own.

The latest voice in the chorus is Marco Oviedo from Barcalys, who this week published a fascinating research note that concludes, “after lagging Chinese manufacturing exports for a decade, Mexico has taken the lead post-2008-09. We believe this change is likely to be structural and persistent”. Continue reading »

A successful transition from cheap, contract manufacturer to high-end, consumer brand name is the holy grail for many Chinese companies. One company is making progress.

Goodbaby International Holdings, the world’s largest maker of baby strollers, has announced a 27 increase in its profit from core operations to HK$119.3m in the first half of the year as well as a 17 per cent increase in sales to HK$2.311bn.

“For us, it’s bright in the east and bright in the west. Sales of our own-brand products have gone up a lot in the US and in Europe despite those regions’ economic woes,” said chairman Song Zhenghuan. Investors seemed more than happy with the results, marking the shares up 10 per cent. Continue reading »