Asian Factory Activity Stutters, Led by China


New export orders in China fell in February compared with January and growth in overseas demand for Japanese and South Korean goods eased, purchasing managers’ reports said.

The data painted a gloomier picture compared with January when factories outside of China had shown signs of solid expansion.

The HSBC/Markit purchasing managers index (PMI) on China manufacturing fell to 48.5 in February, a seven-month low and the third straight monthly decline in the index.

A government PMI released on Saturday fell to 50.2, indicating the slowest growth in eight months. A PMI above 50 points to growth from the previous month, while one below 50 suggests contraction.

“Signs are becoming clear the risks to GDP growth are tilting to the downside,” Hongbin Qu, chief economist for China at HSBC, said in a statement accompanying its PMI release.

An HSBC/Markit PMI on South Korea fell to 49.8 in February, marking the first contraction in the sector in five months. New export orders are growing, but at their weakest pace in five months.

Japanese manufacturers are still growing strongly off the back of aggressive economic stimulus policies promoted by Prime Minister Shinzo Abe. But a Markit/JMMA PMI released late last week pulled back from an eight-year high to 55.5, marking the first decline in the index in seven months.

New export orders showed demand was still expanding, but the index fell for the third straight month.

In India, whose economy is less reliant on exports, the PMI rose to 52.5 for its highest level in a year. Overall new orders were also rising at their strongest pace in a year, which HSBC economist Leif Eskesen said was partly a reaction to reduced economic uncertainty compared with last year. At that time, the currency fell to a record low against the dollar as investors worried about a gaping current account deficit.

Euro zone manufacturing PMI figures due later on Monday are expected to show steady growth in February from January.

Similar U.S. data – also due later on Monday – is forecast to show a sliver of improvement in growth in the manufacturing sector, although much focus will be on new order growth, which slumped in January — the most in more than three decades.


While Chinese manufacturers were struggling for growth, the services sector regained some momentum in February. China’s official non-manufacturing PMI rose to a three-month high of 55.0.

“If the services PMI is to be believed, the service sector is not doing so bad, but … the manufacturing, or the investment-heavy sector, not as well,” said Wei Yao, China economist at Societe Generale in Hong Kong.

Although the PMI indexes are seasonally adjusted, some analysts cautioned against reading too much into the latest Chinese data, given the possible impact from the long Lunar New Year holiday, which began on Jan. 31 and covered early February. Many businesses close for periods surrounding the holiday.

China’s statistics bureau will release combined January-February figures for factory output, fixed-asset investment and retail sales later this month.

In recent weeks, China’s economic indicators have been mixed. Weak investment and declining PMI readings have been countered by surprisingly buoyant exports and bank lending figures.

The annual parliament session, due to start on Wednesday, will provide the next marker for financial markets on the outlook for the world’s second-biggest economy.

Premier Li Keqiang is widely expected to say that the government will maintain the 2013 economic growth target of 7.5 percent in 2014.

Although the pace of China’s expansion has slowed down sharply from the breakneck double-digit pace of the last three decades, analysts at Bank of America Merrill Lynch said a 7.5 percent growth rate was achievable this year.

“We don’t think policymakers will attach a big weight to the PMI readings in January and February,” they said in a client note, arguing the government could stick with neutral fiscal and monetary policies for now. “We think the government has enough policy room to achieve 7.5 percent GDP growth this year.”

Asia’s 200 Companies With Sales Under $1 Billion. Forbes

Again this year, China/Hong Kong firms dominate the list with 63 names. Add those domiciled in Taiwan, and you get to 89 in Greater China—with several more in Southeast Asia drawing on Chinese business networks. So, the growth of the world’s second-largest economy continues to be central to the BUB story.

Weakness in sustaining star performers in this “SME”-sized sector was in evidence where nations failed to gain any representation or, in the case of the otherwise booming Philippines, scored only one.  By contrast, Vietnam, struggling to regain recent economic-growth rates, has 10 names on the list.  Meantime, slowdown-hit India, with 19 selections, fell to its lowest level since 2007.

FORBES ASIA’s editors, drawing on databases of 15,000 stock-traded companies in Asia-Pacific with revenues between $5 million and $1 billion, winnowed the choice to 873 that satisfied the following criteria: five-year average return on equity and pretax margin greater than 10%, positive sales and earnings per share growth for both the most recent fiscal one and three-year periods, debt less than 75% of shareholders’ equity, and a trading history of at least on year.

The final list of 200 is not ranked, but qualified firms are measured comparatively. This is truly a select field—the top 1.3% of the category.

Only  52 of the 200 repeat from last year, although a dozen others returned to the BUB from lists previous to that. Of the 2013 group, four companies—Hartalega Holdings , Mudajaya Group , Philweband YGSoft—share the mark for longest BUB streak, four years apiece. (Last year’s record holder, Ctrip, fell off the list along with longtime regular Changyu Pioneer Wine, as China’s economy adjusted.)

Which industry spawned most of our Best Under A Billion? Information technology, with 55 companies when you include six chipmakers.

A handful of achievers from last year’s 200 “graduated” off the list this year by exceeding $1 billion in latest-year revenues. Among them: China’s Kangmei Pharmaceutical and Tianneng Power International .

This year’s compilation involved number crunchers Christina Settimi, Michael Ozanian and  Scott DeCarlo, with assistance from our editorial team in Asia and Sandy Chan, Heng Shao and Dan Alexander in N.Y.

To see the biggest individual shareholders of companies for to