Asian factory activity contracts, trade truce fails to break deadlock

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Asian factory activity contracts, trade truce fails to break deadlock

Factory activity in most of the Asian countries had curbed sharply on June, as a simmering conflict between of trade-interests between United States and China had added further strains on to an existing slowdown. According to official data released by this weekend, Chinese manufacturing sectors appeared to be exhausted by the latest trade row, while a survey conducted by officials of Japan had pointed towards declined factory activity to a three-month low.

Besides, an official survey of South Korean economy had revealed a sharp plunge of the nation’s exports amid an escalating trade row, battering trade sentiments and heaving the pandora’s box of monetary stimulus up out in the air.

In point of fact, the latest series of corrosive trade data came after leaders of G20 had warned of a slowing global growth amid escalating geopolitical trade tensions over this weekend. Although leaders of China and United States had reached a trade truce allowing China’s purchase of more US agricultural goods and averting another leg of tariff hike on remaining $300 billion worth of Chinese imports, analysts doubted that the truce would actually lead to sustained ease of trade tensions while trade uncertainties across the globe had been lingering and dampening corporate investments alongside global growth.

Adding the global economy had not been out of the woods yet, a chief economist at Dai-ichi Life Research Institute in Tokyo, Yoshiki Shinke said, “It’s too early to turn optimistic. The two countries just kicked the can down the road and there’s no knowing what could happen next.

Global manufacturing activity hasn’t hit bottom yet. U.S. business confidence, particularly that of manufacturers, has been weakening and if this continues, it may hurt economies across the world”.