HSBC's China Purchasing Mangers' Index fell to a three month-low of 54.4 in December from 55.3 in November, suggesting that the pace of business expansion in the factories of the world's second-largest economy was moderating but still strong.
While the situation in Japan is by far less bright, but fits well into picture of concerns expressed by ECRI yesterday, as explained in the comment by Nomura this morning:
In December, the Japanese manufacturing purchasing managers' index PMI rose 1.0pt m-m, to 48.3. Although the index was below the 50 watershed between economic expansion and contraction, we see it as indicating an increased likelihood that manufacturing production activity has bottomed. The new orders index rose 1.9pt m-m to 45.7, boosting the overall index. Given that the export order index continued to decline, by 0.3pt to 46.6, domestic new orders appear to have improved sharply in December. The employment index rose 0.8pt m-m to 49.5pt, in tandem with the improvement in production activity. We project that exports will see renewed recovery and acceleration from 2011 Q1 supported by economic recovery overseas, but we think downside risks need watching given the decline in the export order index.
However, the US manufacturing appears to be the brightest spot?
Click on chart to enlarge, courtesy of BNP Paribas.