Asia’s largest manufacturing economies stepped up activity in November, with China’s factories extending their recovery driven in part by Beijing’s stimulus and a rush to export, though weak patches in other parts of the region pointed to some challenges.

Risks to global trade from a second Donald Trump presidency loomed large over factories as investors considered a series of purchasing managers’ indexes (PMIs) published on Monday, which painted a mixed picture for Asia’s export-reliant economies.

China’s factory activity expanded at the fastest pace in five months in November as new orders, including those from abroad, led to a solid rise in production, the Caixin PMI showed.

That largely echoed a modest expansion in manufacturing activity seen in an official survey released on Saturday, suggesting a blitz of stimulus is finally trickling through to the world’s second-largest economy.

The improvement in China helped other Asian factory powerhouses such as South Korea and Taiwan, where activity also picked up.

Xing Zhaopeng, ANZ’s senior China strategist, said China’s recovery has mostly been export-driven.

“Both new export orders in the official PMI and Caixin PMI suggest buyers were rushing to place orders. But the Chinese domestic demand was still weak as the official non-manufacturing PMI was 50,” said Xing.

Many Chinese exporters are scrambling to get their goods to major markets ahead of tariffs from the U.S. and European Union, which are among several risks policymakers now need to navigate.

Beijing launched a series of major stimulus packages in the second half of this year to arrest a sharp slowdown in spending and production.

While analysts say more is still needed to sustain a sturdier recovery, there are signs this year’s measures have had some effect with retail spending and the property market stabilising.

Overhanging those positive signs, however, is the threat posed to global trade by proposed tariffs from U.S. President-elect Trump, who enters the White House on Jan. 20 next year.

Trump has promised aggressive tariffs on major U.S. trading partners, notably China, in a push to revive American industry and employment.

Last week, he said he would impose a 10% tariff on Chinese goods so that Beijing does more to stop the trafficking of chemicals used in the production of fentanyl, which followed his earlier threats of tariffs in excess of 60% on Chinese goods.

Elsewhere in Asia, conditions worsened with Japan’s PMI reporting the fastest decline in activity in eight months as factories trimmed output on weakening demand.

That was slightly offset by official data that showed Japanese corporate spending on plant and equipment accelerating in the third quarter.

In Southeast Asia, PMIs showed factory activity extending declines in Indonesia and Malaysia and slowing expansion in Thailand and Vietnam. — Reuters

SYDNEY – Australia proposed a law on Monday that could impose fines of up to A$50 million ($33 million) on global technology companies if they suppress competition and prevent consumers from switching between services.

The centre-left Labor government has targeted Big Tech’s influence, and parliament passed a law last week that banned social media for children aged under 16.

The proposed law would empower Australia’s competition regulator to oversee compliance, investigate anti-competitive practices online and fine companies, Assistant Treasurer Stephen Jones said in excerpts of a speech due later on Monday.

“The digital economy challenges our current legal framework,” Jones will in the speech viewed by Reuters at the public policy research McKell Institute in Sydney.

“The dominant platforms can charge higher costs, reduce choice, and use sneaky tactics to lock consumers into using certain products. Innovation outside of the established players becomes almost impossible.”

Apple, Google and Meta, which dominate app downloads and ad revenues, did not immediately respond when approached for comment on the proposed law.

The consultation process is scheduled to end on Feb. 14 and more discussions will be done to prepare the draft legislation.

The planned law, similar to the European Union’s Digital Markets Act legislation, could make it easier for people to move among competing services, such as social media platforms, internet browsers and app stores.

Based on advice from the Australian Competition and Consumer Commission, the government can pick platforms that pose the greatest risk of hurting competition.

“Initially, we will look to prioritise app marketplaces and ad tech services for service-specific obligations,” Jones will say.

These specific obligations would restrict companies from pushing their apps with low user ratings to the top of their search list and prevent providing favourable treatment to their own services, compared with third parties.

A competition commission report on digital platform services in 2022 showed Google controlled 93% to 95% of online search services in Australia, while Apple’s App Store accounted for about 60% of app downloads and Google Play Store 40%.

Meta Platforms’ Facebook and Instagram together supplied 79% of social media services in the country. — Reuters

BEIJING – China’s factory activity expanded at the fastest pace in five months in November as new orders, including those from abroad, led to a solid rise in production, pushing manufacturers’ optimism degree to an eight-month high, a private-sector survey showed on Monday.

The reading largely echoed an official survey on Saturday, which showed manufacturing activity expanded modestly, suggesting a blitz of stimulus is finally trickling through the world’s second-largest economy just as Donald Trump ramps up his trade threats.

The Caixin/S&P Global manufacturing PMI rose to 51.5 in November from 50.3 the previous month, the highest since June and beating analysts’ forecasts in a Reuters poll of 50.5.

New orders placed with Chinese manufacturers increased at the fastest rate since Feb. 2023.

New export orders, in particular, rose for the first time in four months and marked the highest in seven months. The orders mainly rose in the investment and intermediate goods segments and fell fractionally for consumer goods makers.

Anecdotal evidence revealed that better underlying demand, new product launches and stockpiling following the U.S. election were among the reasons for the rise in new work.

President-elect Trump last week pledged an additional 10% tariff on imports from China. He had previously threatened to end China’s most-favoured-nation trading status and slap tariffs on Chinese imports in excess of 60% – much higher than those imposed during his first term.

China’s commerce ministry said Beijing’s position against unilateral tariff hikes is consistent, and “imposing arbitrary tariffs on trading partners will not solve America’s own problems.”
As Chinese firms signalled hopes that better economic conditions and government policies can support sales in the year ahead, the level of their confidence hit the highest since March, the Caixin survey showed.

Despite a second successive month of accumulation of backlogged work, firms remained cautious about hiring, though the rate of job shedding eased from October.

“While the economic downturn appears to be bottoming out, it needs further consolidation,” said Wang Zhe, economist at Caixin Insight Group.

Citing the continued contraction of employment, Wang said it indicated the effect of economic stimulus is yet to be felt in the labour market, and businesses’ confidence in expanding their workforce needs to be strengthened.

Cost concerns also rose as average input prices increased at the fastest pace in five months with rising raw material costs. In turn, firms passed additional cost burdens to clients, leading to the quickest growth in selling prices since October 2023.

As a deep property downturn and tepid domestic demand weigh on economic growth momentum, government advisers are recommending Beijing maintain an economic growth target of around 5.0% for 2025, Reuters reported previously. Markets expect stronger fiscal stimulus to mitigate the impact of expected U.S. tariff hikes on Chinese exports. — Reuters

OTTAWA – Canadian Prime Minister Justin Trudeau promised President-elect Donald Trump that Canada would toughen controls over the long undefended joint border, a senior Canadian official said on Sunday.

Trudeau flew to Florida on Friday to have dinner with Trump, who has promised to slap tariffs on Canadian imports unless Ottawa prevents migrants and drugs from crossing the frontier.

Canada sends 75% of all goods and services exports to the United States and tariffs would badly hurt the economy.

Public Safety Minister Dominic LeBlanc, who sat at the head table with Trudeau and Trump, said the two men discussed additional security measures Canada would be introducing.

“We’re going to look to procure, for example, additional drones, additional police helicopters, we’re going to redeploy personnel … we believe that the border is secure,” he told the Canadian Broadcasting Corp.

“It’s important, I think, to show Canadians and the Americans that we’re stepping up in a visible and muscular way, and that’s exactly what we’re going to do,” he added, promising more details in the days and weeks to come.

Canada, he said, would continue to make the case that tariffs would damage both nations, given how interconnected the two economies are.

“I’m confident that the Americans will understand that it’s not in their interest … to proceed in this way,” he said, describing the dinner meeting as very warm and cordial.

Trump said on Saturday he discussed the border, trade and energy in a “very productive” meeting with Trudeau.

The friendly nature of the dinner contrasts with previous exchanges between the two men.

Trump called Trudeau “a far left lunatic” in 2022 for requiring truck drivers crossing the border to be vaccinated against COVID. In June 2018, Trump walked out of a G7 summit in Quebec and blasted Trudeau for being “very dishonest and weak.”

At the end of the dinner, LeBlanc said, Trump walked Trudeau to his car and said “Keep in touch. Call me anytime. Talk soon.” — Reuters

BUSAN, South Korea – Countries negotiating a global treaty to curb plastic pollution failed to reach agreement on Monday, with more than 100 nations wanting to cap production while a handful of oil-producers were prepared only to target plastic waste.

The fifth U.N. Intergovernmental Negotiating Committee (INC-5) meeting intended to yield a legally binding global treaty in Busan, South Korea, was meant to be the final one.

However, countries remained far apart on the basic scope of a treaty and could agree only to postpone key decisions and resume talks, dubbed INC 5.2, to a later date.

“It is clear that there is still persisting divergence,” said Inger Andersen, executive director of the U.N. Environment Programme.

The most divisive issues included capping plastic production, managing plastic products and chemicals of concern, and financing to help developing countries implement the treaty.

An option proposed by Panama, backed by more than 100 countries, would have created a path for a global plastic production reduction target, while another proposal did not include production caps.

The fault lines were apparent in a revised document released on Sunday by the meeting’s chair Luis Vayas Valdivieso, which may form the basis of a treaty, but remained riddled with options on the most sensitive issues.

“A treaty that … only relies on voluntary measures would not be acceptable,” said Juliet Kabera, director general of Rwanda’s Environment Management Authority.

“It is time we take it seriously and negotiate a treaty that is fit for purpose and not built to fail.”

A small number of petrochemical-producing nations, such as Saudi Arabia, have strongly opposed efforts to reduce plastic production and have tried to use procedural tactics to delay negotiations.

“There was never any consensus,” said Saudi Arabian delegate Abdulrahman Al Gwaiz. “There are a couple of articles that somehow seem to make it (into the document) despite our continued insistence that they are not within the scope.”

China, the United States, India, South Korea and Saudi Arabia were the top five primary polymer-producing nations in 2023, according to data provider Eunomia.

ENTRENCHED DIVISIONS
Had such divisions been overcome, the treaty would have been one of the most significant deals relating to environmental protection since the 2015 Paris Agreement.

The postponement comes just days after the turbulent conclusion of the COP29 summit in Baku, Azerbaijan.

At Baku, countries set a new global target for mobilizing $300 billion annually in climate finance, a deal deemed woefully insufficient by small island states and many developing countries.

The climate talks were also slowed by procedural maneuvers by Saudi Arabia – who objected to the inclusion of language that reaffirmed a previous commitment to transition away from fossil fuels.

Some negotiators said a few countries held the proceedings hostage, avoiding compromises needed by using the U.N.’s consensus process.

Senegal’s National Delegate Cheikh Ndiaye Sylla called it “a big mistake” to exclude voting during the entire negotiations, an agreement made last year during the second round of talks in Paris.

“This outcome underscores the complexity of addressing plastic pollution on a global scale and the need for further deliberations to achieve an effective, inclusive and workable treaty,” said Chris Jahn, council secretary of the International Council of Chemical Associations (ICCA), representing plastic makers.

“There is little assurance that the next INC will succeed where INC-5 did not,” environmental group GAIA said.

Plastic production is on track to triple by 2050, and microplastics have been found in the air, fresh produce and even human breast milk.

Chemicals found to be of concern in plastics include more than 3,200 according to a 2023 U.N. Environment Programme report, which said women and children were particularly susceptible to their toxicity.

Despite the postponement, several negotiators expressed urgency to get back into talks.

“Every day of delay is a day against humanity. Postponing negotiations does not postpone the crisis,” said Panama’s delegation head Juan Carlos Monterrey Gomez on Sunday.

“When we reconvene, the stakes will be higher.” — Reuters

BERLIN – Volkswagen workers will go on warning strikes on Monday at plants across Germany, labour union IG Metall said, marking the first large-scale walkouts at Volkswagen’s domestic operations since 2018.

The start of the strikes represents a further escalation of a dispute between Europe’s top carmaker and its workers over mass layoffs, pay cuts and possible plant closures – drastic measures the company says it cannot rule out in the face of Chinese competition and cooling consumer demand.

Labour representatives at VW had on Nov. 22 voted for limited strikes at German operations from early December after talks over wages and plant closures failed to achieve a breakthrough.
“If necessary, this will be the toughest collective bargaining battle Volkswagen has ever seen,” IG Metall negotiator Thorsten Groeger said in a statement.

The carmaker said it continues to rely on constructive dialogue to find a sustainable solution.

“Volkswagen respects the right of employees to take part in a warning strike,” a spokesperson said in reply to the union’s announcement, adding that the company had taken steps in advance to ensure a basic level of supplies to customers and minimize the impact of the strike.

Warning strikes in Germany usually last from a few hours.

The union had last week proposed measures it said would save 1.5 billion euros ($1.6 billion), including forgoing bonuses for 2025 and 2026, which Europe’s top carmaker dismissed.

Volkswagen has demanded a 10% wage cut, arguing it needs to slash costs and boost profit to defend market share in the face of cheap competition from China and a drop in European car demand.

The company is threatening to close plants in Germany for the first time in its 87-year history.

“Volkswagen has set fire to our collective agreements and instead of extinguishing this fire in three collective bargaining sessions, the management board is throwing open barrels of petrol into it,” Groeger said.

An agreement not to stage walkouts had ended on Saturday, IG Metall said, enabling workers to carry out warning strikes from Sunday across VW AG’s German plants.

“Warning strikes will start at all plants from Monday. How long and how intensive this confrontation needs to be is Volkswagen’s responsibility at the negotiating table,” Groeger said.

Labour representatives and management will meet again on Dec. 9 to carry on negotiations over a new labour agreement for workers at the German business – VW AG – with unions vowing to resist any proposals that do not provide a long-term plan for every VW plant. — Reuters