Prime Minister Narendra Modi has often times told that the 21st century will belong to Asia. Many however, have said that the 21st century will belong to India and since long people have been talking about China slowing down and imploding sooner than later.
Whether China will implode or not only time can tell but for sure it is slowing down and really fast. The latest survey figures suggest that all Asian economies from China to Indonesia but India are slowing down including China which for a seventh straight month showed decline in manufacturing activity.
Situation in Japan, Indonesia and Malaysia:
Japanese factories also saw their weakest growth in last eight months. Indonesia and Malaysia were worse affected with their economies shrinking to 17th and 11th month lows respectively. Malaysia's Nikkei Manufacturing PMI fell sharply to 47.8 in February, compared with 48.6 in January.
A fall in domestic demand has led to the fall in PMI for Malaysia as for the country there has been a sharp rate in rise of export orders since October 2015.
Taiwan which had been left unaffected till date also showed reduction in manufacturing activities for the first time in three months.
Chinese economy in doldrums:
As per the Nikkei China's official Purchasing Managers' Index (PMI) was 49.0 in February which was 0.4 point mark lower than January figure. China's PMI has been below 50 mark for seventh consecutive month. As per the survey figure has to be above the 50 mark as that mark separates growth from contraction.
Other worrying factor for China is that there is a fall in the index's employment gauge also as the index dropped to its lowest since January 2009. South Korea's exports too fell for the 14th consecutive month.
Encouraging figures for India:
India on the contrary maintained its PMI as new orders showed a strong upturn since September 2015. This is a huge boost to Prime Minister Narendra Modi's dream initiative #MakeInIndia.
PMI for India for manufacturing was at 51.1 points in February which is same as it was during January.
Pollyanna De Lima, economist at Markit was quoted to say that, "The Indian manufacturing economy edged further in the right direction during February, eking out modest gains in new orders and output".
The only point of worry for India can be that the new business however, failed to lift the growth of output and workforce numbers. The reasons given for the same are firms holding off hiring as the firms are becoming more cost conscious as the demand conditions are not that favourable.
The manufacturing has been boosted by low crude oil prices which is allowing RBI an opportunity to loosen monetary policy to give further boost to the economy.