Asia Weakness Heightens Fears of Contagion
Manufacturing activity in China and across a wide swath of Asia slowed in May, heightening fears that the turmoil in Western economies is dragging down one of the few remaining engines of global growth. Two purchasing managers indexes for China fell in May, briefly rattling investors Friday and stoking talk Beijing may have to respond aggressively to support growth. Indonesia posted its first trade deficit in nearly two years, and South Korea’s exports, considered a bellwether for Asia, unexpectedly fell for a third straight month. “The crisis in Europe is one reason; the other one is the China slowdown. But I think less appreciated is that the height of uncertainty about the outlook has caused Asian firms and multinationals in Asia to pause in their investments”… [said Rob Subbaraman, chief Asia economist at Nomura Securities.] …
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