The Star Online: Business
The Star Online: Business |
| Posted: 05 Nov 2012 05:46 PM PST BEIJING: A private survey of China's growing services sector slipped in October, with weaker-than-expected new orders injecting a note of caution after three previous purchasing managers index (PMI) surveys for October showed the world's second largest economy regaining momentum. The HSBC Purchasing Managers Index for China's services sector released yesterday showed the index slipped to 53.5 in October from September's four-month high of 54.3, as higher costs and greater competition squeezed margins. In India, a decline the HSBC PMI services sector index for October suggested a slowdown in Asia's third largest economy had not yet run its course, as weakness in the United States and Europe hurt orders and forced firms to hire fewer workers. In China and India, the index remained above the 50-point level that indicates accelerating growth. China's services industry, which covers everything from banks, restaurants to Internet firms, has weathered the global slowdown much better than the factory sector. But the services sector is underdeveloped, accounting for just 43% of GDP, compared with over 70% in Western economies. The HSBC results contrast with an official non-manufacturing PMI released by the National Bureau of Statistics on Saturday, which rebounded to 55.5 in October from a nearly two-year low of 53.7 in September, reflecting strength in the construction sector. The HSBC PMI does not include construction. Similarly, manufacturing sector PMIs released last Thursday by both the statistics bureau and HSBC showed signs the economy began to perk up in October. "Despite the moderation of services activity growth, the Chinese economy is gradually bottoming out as the filtering through of earlier easing policy is boosting domestic demand," Hongbin Qu, HSBC's chief economist for China, wrote in a note accompanying the report. "We expect the continuation of policy easing to sustain the recovery in the manufacturing sector in the coming months, which should lend additional support to growth of services sectors and consumer spending." China's annual GDP growth is expected to beat the full-year target of 7.5%, but that will be a marked slowdown from last year's 9.2% growth and the average of around 10% for the last three decades. Beijing has been following a programme of pro-growth fine-tuning of economic policies for a year and analysts broadly expect that to remain in place when a new leadership lineup of the ruling Communist Party is unveiled at a Congress this month. China's central bank said on Friday that it would prioritise supporting the economy, reflecting its feeble state. The central bank has been steadily easing policy to boost credit, while the government has fast-tracked infrastructure projects to boost investment. The property sector has shown signs of warming up in recent months due to policy easing and support from local governments. The official non-manufacturing PMI showed the sub-index for the construction services sector rose to 60.2 from 58 in September. Anemic new orders cast a pall over the HSBC services PMI, with that subi-ndex falling to 53 in October from 54 in September, according to the HSBC survey compiled by Markit Economics. Reuters |
| Indonesia third-quarter growth slows Posted: 05 Nov 2012 05:43 PM PST JAKARTA: Indonesia's economy grew 6.2% in the third quarter from a year earlier, in line with forecasts, as the global downturn finally began to drag on a country whose resilience has attracted a flood of foreign investment this year. A slide in exports saw the annual rate of gross domestic product (GDP) growth in the G-20 economy ease from 6.4% in the second quarter, remaining strong by global standards but at the slackest pace nonetheless since the third quarter of 2010. "The third-quarter GDP matched the consensus, signalling some moderation in the momentum, though nothing to be alarmed about as Indonesia is still among the fastest growing economies in the region," said Radhika Rao, an economist at Forecast in Singapore. "The subdued exports performance could emerge as the main soft spot, with the slowdown in imports in recent months to stoke concerns over the sustainability of a strong investments cycle." Statistics bureau official Suhariyanto said the trade situation meant it would be difficult to reach a government forecast for steady full-year growth of 6.5%, and saw 6.2%6.3% as likely in line with economists' views. Imports also started falling in the third quarter, the first sign of weakness in the buoyant domestic demand that has been protecting the world's fourth most populous nation from a harder downturn. Over two-thirds of Indonesia's exports are commodities such as palm oil and coal, which have been hurt by weaker Chinese demand. "Any slowdown in China will affect directly our major export commodities," said Bambang Brodjondegoro, a finance ministry official, speaking on the sidelines of a G-20 meeting in Mexico. "During this turbulence we can maintain our growth by domestic consumption and investment." - Reuters |
| Posted: 05 Nov 2012 05:39 PM PST VIENTIANE: European leaders said they were finally getting a grip on the eurozone debt crisis and urged Asia to do more to boost global economic growth. Top European officials at a major summit in impoverished Laos, including French President Francois Hollande and Italian Prime Minister Mario Monti, led efforts to encourage much-needed trade with Asia's fast-growing economies. Europe had made a "huge effort" to tackle the euro crisis "by more coordination, by fleshing out the future of a genuine economic and monetary union", Monti said, noting that Asia also faced slowing economic growth. "Past events showed us that the current crisis does not stop on the edge of town but it is really knocking at all doors," he warned. Dozens of leaders jetted into the small land-locked nation for the Asia-Europe Meeting, which provides an opportunity to strengthen trade links between two regions that together account for about half of global economic output. There were calls for Asia to play a greater role in efforts to revive the world economy and to renounce trade barriers, after years of rapid growth in the region on the back of rising exports to Europe and other Western markets. "Promoting trade is not only fostering domestic demand but also avoiding protectionism," said European Union (EU) president Herman Van Rompuy, who sought to allay fears that the eurozone might break up. "The financial stability of the eurozone is much stronger than a few months ago. The euro is an irreversible project and on this basis growth can pickup in the course of 2013," he said. Europe's diplomatic offensive is seen as a sign of the growing importance that it places on Asia's vibrant economies. "With the EU in the middle of a lost decade and facing protracted recession and fiscal austerity, European political and business leaders are turning to Asia's fast-growing economies for economic salvation," said Rajiv Biswas, Asia-Pacific chief economist at consultancy firm IHS Global Insight. Europe's leaders may lobby Chinese Premier Wen Jiabao to deploy some of Beijing's trove of about US$3 trillion in foreign exchange reserves the largest in the world to invest in EU bailout funds. At the same time Hollande criticised the inflexibility of the Chinese yuan and certain other Asian currencies, calling for "fair exchange rates". "Asians have gained a lot from our growth. Now it's time for them to boost our growth with their demand," he added. Wen told the summit that his country had "promoted a balanced growth between imports and exports". "This shows that China is an important engine for world economic growth and has played a crucial role in driving the global economic recovery," he said. - AFP |
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