One of China’s most important gauges of manufacturing activity has contracted for the first time since the early stages of the coronavirus pandemic, as measures to contain a recent outbreak weighed on an already fragile economic backdrop.
The Caixin manufacturing purchasing managers’ index, an independent survey of factory activity, came in at 49.2 in August, dropping below the 50-mark that separates monthly expansion from contraction, for the first time since April 2020.
The data were released a day after the publication of official PMI manufacturing figures fell just short of a contraction at 50.1, its weakest reading since February last year. The measure of the services sector plunged into negative territory as a recent outbreak of Covid-19 weighed on activity.
The indices were one of the clearest signs of a loss of momentum across China’s economy, which outperformed other big economies last year on the back of an industry fuelled recovery. But China is now grappling with weaker export demand, high prices of raw materials and a slowing property sector.
Is your industry feeling the effects of the surging Delta variant? Let me know at emily.goldberg@ft.com. Thanks for reading FirstFT Asia. — Emily
Five more stories in the news
1. SEC boss: Crypto platforms need regulation Gary Gensler, chair of the Securities and Exchange Commission, has warned in an interview with the Financial Times that cryptocurrency trading platforms are putting their survival at risk unless they heed his calls to work within the regulatory framework. “Finance is about trust, ultimately,” he said.
2. Hamid Karzai unlikely to be part of Taliban-led government Former Afghanistan president Hamid Karzai is unlikely to play a prominent role in a Taliban-led government, while veteran politician Abdullah Abdullah is viewed as the “least controversial” option by the Islamist movement, according to two senior Pakistan officials.
Go deeper: The Taliban is trying to encourage some return to normality even as it considers how to reshape Afghan society. Meanwhile, Afghans are facing bank runs and food shortages.
3. Judge to approve to Purdue Pharma opioid settlement Judge Robert Drain, a federal bankruptcy judge, has given conditional approval to what could amount to a $10bn plan from OxyContin maker Purdue Pharma to settle thousands of lawsuits over its role in fuelling the US opioid crisis. (AP)
4. Tencent boosts global investments The social media, gaming and fintech group has increased its investments in overseas start-ups more than sevenfold this year, accelerating the global expansion of China’s most valuable company as Beijing tightens regulatory scrutiny of tech groups.
5. Biden meets Ukraine leader amid tensions over Russia Joe Biden sought to reassure Ukraine of America’s “ironclad” commitment to its sovereignty and opposition to “Russian aggression” at a White House meeting with president Volodymyr Zelensky yesterday.
Coronavirus digest
India administered a record of 13m Covid-19 jabs on Tuesday, as supply constraints eased, allowing the pace of vaccinations to quicken.
About 500,000 people in the UK with severely weakened immune systems will be offered a third dose of a Covid-19 jab.
The fragmented US healthcare system has made it easier for some seeking an unofficial third vaccine to skip the queue.
Coronavirus’ degenerative effect on the brain will add to the “pandemic of dementia” that will affect an estimated 80m people by the end of the decade, scientists and psychiatrists have warned.
Follow our live coronavirus blog and sign up to our Coronavirus Business Update email for a regular briefing on how the pandemic is affecting markets, global business and our workplaces.
The day ahead
China International Fair for Trade in Services The fair will open in Beijing today and will continue through September 7. President Xi Jinping will give a video address at the event today.
Voting opens for UK Green party leadership Voters go to the polls as the party decides on entirely new leadership in England and Wales. England’s Greens have sought to translate their growing support into local power. (Guardian, FT)
What else we’re reading
The struggles of India’s microfinance industry The expansion of credit in recent decades has allowed low-income Indians to take loans to pay for everything from dairy cows to new houses to job-creating small businesses. But the pandemic has left thousands struggling to pay their debts, threatening one of the country’s economic success stories.
Inflation puts pressure on America’s dollar stores Close to 2,000 new dollar stores are expected to open this year, according to Coresight Research. That represents almost half of planned US retail openings. What remains to be seen is if dollar stores can keep finding the affordable products, and the staff, to meet their aggressive growth goals.
Education crisis looms in Latin America in wake of Covid Schools across the region have remained closed for much of the pandemic, forcing students to distance learn — often over unreliable mobile and internet connections. The World Bank estimates prolonged closures could cost Latin America $1.7tn in lost future income.
Join the FT online as speakers from ISA, World Bank, BlackRock and Natura will analyse post-pandemic scenarios in Latin America and discuss how business, government and civil society can work together to move towards a more sustainable future. Sign up here to join on September 2.
Google goes full-speed on developing its own chips The US tech giant plans to start using self-developed central processing units for its laptop and tablet computers, which run on its Chrome operating system, around 2023, according to a Nikkei Asia exclusive.
FT 1000: Europe’s Fastest Growing Companies The latest annual ranking of businesses by revenue growth puts a UK energy provider in the top slot. Explore the 2021 list and apply for a place in the sixth ranking, by November 30.
Thanks to those who took our poll yesterday. Fifty-five per cent of respondents say they would not support a universal basic income policy.
Travel.
Book Towns are thriving around the world but Wigtown in Scotland goes one better, giving visitors the keys to their own shop. A few decades ago, Wigtown beat at least four other contenders to become Scotland’s National Book Town. Book Village might be more accurate. Henry Mance left the algorithms of Amazon behind and entered a world of loveable junk.
Source: Economy - ft.com
