Asian factories pick up steam in shadow of Trump protectionist threat
By Saikat Chatterjee
HONG KONG (Reuters) - Asian factories extended a global manufacturing revival as activity picked up steam in February, though the outlook for many of the region's export-reliant economies remained uncertain in the wake of U.S. President Donald Trump's protectionist stance.
Manufacturing surveys for Asia, including for its two biggest economies China and Japan, showed a broadly positive impulse for exports in a welcome sign for many of the companies tapped into the global supply chain.
"Encouragingly, the data indicated that the current upturn in demand remains broad-based across both domestic and international markets, while a further steep increase in purchasing activity raises the prospect of continued production growth in coming months," said Annabel Fiddes, economist at IHS Markit, referring to Taiwan's strong PMI reading.
Trump, however, remained the great unknown risk factor for Asia and the rest of the world.
In a key speech to Congress, the U.S. president outlined his plan for his first year in office that included healthcare and tax reforms, but he did not announce anything new on trade.
Trump's protectionist stance has rattled global markets, with policymakers and investors remaining on edge until they see more clarity, and specific details, on U.S. economic policies.
Authorities in China, whom Trump last week labeled the "champions of currency manipulation", can take comfort from a private survey showing factory activity expanded for an eighth consecutive month thanks to a pick up in export orders.
Zhou Hao, an economist at Commerzbank expects "bubble deflating" will remain a key theme at the upcoming National Congress, underscoring challenges for policymakers in China as an explosive rise in debt in recent years has stoked speculative asset bubbles. Continued...