BEIJING: China and Japan reported depressing industrial data, adding to pressure on leaders of the world’s second- and third-largest economies to launch new stimulus.
Two surveys showed Chinese manufacturing was weak in March and employers cut more jobs. In Japan, a central bank survey found companies expect conditions to deteriorate and plan to cut investment.
The latest data muddy the global outlook at a time when the U.S. is the only major economy to show signs of healthy momentum. Both China and Japan are relying on U.S. demand and a strong dollar to offset internal problems. Either could send shockwaves through the global economy if efforts to overhaul their economic models fail.
The loss of manufacturing jobs is a setback for Chinese leaders who are trying to steer their economy to more sustainable growth based on domestic consumption while avoiding a politically dangerous spike in unemployment. They have cut interest rates twice since November but want to avoid a large-scale stimulus that would set back efforts to reduce reliance on investment.
The surveys by HSBC Corp. and an industry group, the China Federation of Logistics and Purchasing, found manufacturing was weak in March. HSBC said companies shed jobs at their fastest rate in seven months. That came after China’s central bank governor, Zhou Xiaochuan, warned Sunday that economic growth had fallen “too sharply.”
Despite improvement in the federation’s index, “growth is still likely to have slowed sharply last quarter,” said Julian Evans-Pritchard of Capital Economics in a report. “We expect more policy support measures, including further rate cuts and required reserve ratio reductions, as the government moves to avoid missing its annual growth target.”
