Asian policy makers in 2014 are hoping a rebound in the industrialized
world will restore their economies to a healthier growth trajectory.
But data released Thursday, the first of the new year,
shows that demand from the U.S. and Europe is playing a less important
role in many Asian nations than in the past.
Purchasing managers indexes, a proxy for gross domestic
product, signaled that manufacturing activity in the region continues to
expand. The pace of expansion, though, slowed in some countries and
export orders remained generally weak, signaling a pickup in the U.S.,
Europe and Japan is failing to jump-start Asia's export-dependent
economies.
HSBC's China PMI slipped to 50.5 in December from 50.8 in
November, a day after China's official PMI fell to 51.0 in December from
51.4. Any result above 50 indicates expansion, while one below that
shows contraction.
The "new export orders" subcomponent of the PMI contracted.
That has confounded some observers, who were expecting stronger numbers
given a recovery in the U.S., which many economists expect to grow by
3% in 2014, and Europe's tentative exit from recession.
"Today's numbers really do point to a structural problem
for Asian exports," said Frederic Neumann, a Hong Kong-based economist
with HSBC. "The headline numbers suggest steady growth across Asia, but
the trade cycle isn't really firing up."
In part, Asia has become less dependent on the U.S. In
2012, 13.6% of East Asian exports went to the U.S., down from 23.8% in
2000, according to the Asian Development Bank. Local demand is playing a
larger role in many economies, particularly China, and intra-regional
trade has become more important.
The mixed picture in Asia might signal weak consumer
spending in the U.S., where the income of median households has hardly
budged in the past year. Mr. Neumann argued that Asia also has been
losing competitiveness due to higher labor and production costs in many
nations.
Some of the data on Thursday was more positive. In Taiwan,
an integral part of global electronics production, the HSBC PMI rose to
55.2 from November's 53.4, its biggest jump since April 2011. New export
orders were at a 32-month high. An official PMI for Taiwan also rose,
to 53.6 from 52.0 in November. South Korea's HSBC PMI rose to 50.8 in
December from November's 50.4.
Taiwan, like South Korea, is more exposed to the U.S. than
China. Taiwanese exports account for about three-quarters of GDP,
compared with around a quarter for China. Taiwan's solid export orders
in recent months might be linked to global smartphone orders, which can
be volatile, many analysts say.
Other economies in the region that rely more on domestic
demand or export more to China than the West, notably Indonesia and
India, also are failing to benefit from better industrialized world
demand.
Indonesia's commodity-driven economy has fared poorly of
late due to weaker growth in China, a major buyer of its nickel and
coal.
Indonesia's HSBC PMI expanded to 50.9 from 50.3. But export
orders remained flat, suggesting most of the improvement in
manufacturing activity came from domestic demand. The country posted a
trade surplus of $777 million in November, largely because imports have
choked off as economic growth slows.
In India, which counts China as one of its largest trading
partners, HSBC's PMI slipped to 50.7 in December from 51.3 a month
earlier.
Some analysts said they expected Asia's economies to show
improvements in the year ahead as the U.S. consumer becomes more
confident. That will benefit countries like South Korea and Taiwan that
make electronics, autos and other goods for Western markets.
"This is looking to be the year that the U.S. consumer,
with a degree of pent-up demand, returns as the primary driver of the
global economy," said Glenn Maguire, chief Asia-Pacific economist at
ANZ.
But others were less sanguine. "One of the key takeaways is
that unlike in the past, the correlation between Asian exports and
[U.S. manufacturing] has become weaker, suggesting that a lot of the
U.S. pickup is domestic-based and hasn't fed through to Asia," Mizuho
Securities chief Asian economist Vishnu Varathan said.
Rather than broad gains across Asia, "we'll see selective
gains based on competitiveness in areas like tablets, smartphones,
shipbuilding," Mr. Varathan said. "The recovery is taking shape, but
it's not a synchronized and strong upturn."
Write to Natasha Brereton-Fukui at
[email protected]
Corrections & Amplifications China's "new export
orders" subcomponent of the PMI contracted. An earlier version of this
article incorrectly stated that South Korea's new export orders also
contracted.