Pantheon Economics with the note:
China’s manufacturing sector is struggling in early 2022, even as Japan and Korea enjoy a bounce in activity. Unfortunately, such divergence rarely lasts. Where China leads, its neighbours tend to follow. But we think Japan and Korea may be spared the worst, even though China’s PMIs signal headwinds for regional manufacturing in Q1 and Q2.
Surveys pointed to a Chinese manufacturing slowdown in January, with the Caixin PMI dropping to 49.1, from 50.9 in December. Japan and Korea, meanwhile, saw further gains in their surveys, extending their recent positive trends. But historically, an inflection point for China’s manufacturing sector proves, in time, to be one for Japan and Korea too, as our chart below shows.
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