Egypt achieves record primary budget surplus of EGP 629bn despite sharp fall in Suez Canal revenues    Escalation in Gaza, West Bank as Israeli strikes continue amid mounting international criticism    Egypt recovers collection of ancient artefacts from Netherlands    Resumption of production at El Nasr marks strategic step towards localising automotive industry: El-Shimy    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, UNDP discuss outcomes of joint projects, future environmental cooperation    United Bank achieves EGP 1.51bn net profit in H1 2025, up 26.9% year-on-year    After Putin summit, Trump says peace deal is best way to end Ukraine war    Jordan condemns Israeli PM remarks on 'Greater Israel'    Egypt's Supreme Energy Council reviews power supply plans for 14 industrial projects    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egypt's FM discusses Gaza, bilateral ties in calls with Saudi, South African counterparts    Egypt prepares to tackle seasonal air pollution in Nile Delta    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egyptian pound closes high vs. USD on Tuesday – CBE    Egypt, Colombia discuss medical support for Palestinians injured in Gaza    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt's govt. issues licensing controls for used cooking oil activities    Egypt to inaugurate Grand Egyptian Museum on 1 November    Egypt's Sisi: Egypt is gateway for aid to Gaza, not displacement    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







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Chinese factories face headwinds in July, Europe withstands Greek turmoil
Published in Ahram Online on 03 - 08 - 2015

Economic headwinds facing Chinese manufacturers intensified last month, with conditions deteriorating to their weakest level in two years, while euro zone factories largely shrugged off Greece's brush with bankruptcy.
July was a fraught month for the global economy, with Athens and its creditors taking debt talks to the brink, while Chinese ructions triggered slides in commodity prices - hitting countries reliant on demand from the world's second-biggest economy.
China's factory activity shrank more than initially estimated in July as new orders fell, dashing hopes the economy may be steadying, a private survey showed on Monday.
The final Caixin/Markit China Manufacturing PMI came in at 47.8 in July, from 49.4 in June. A similar official survey at the weekend was also weaker than expected, suggesting growth had stalled.
Both indicators signalled a slowdown in factory activity at a time when Beijing has been intervening heavily to prevent a full-blown crash in the country's stock markets.
"They are distorted numbers due to the stock market panic. If that's the case, it's a transitory dip and given the amount of stimulus that has been put in place, we should expect a bounce back in the August numbers," said ING economist Tim Condon.
"But the economy can hardly afford much of a headwind, so probably it brings forward the timing of when people expect the next (policy) move from the authorities."
China's central bank has already cut interest rates four times since November and repeatedly loosened restrictions on bank lending in its most aggressive stimulus campaign since the global financial crisis.
But a senior Chinese central bank official predicted downward pressure on the economy will persist in the second half of the year, saying growth in infrastructure spending and exports were unlikely to pick up.
Similar business activity surveys for Taiwan, South Korea and Indonesia - all heavily reliant on Chinese demand - reflected varying degrees of weakness that is clouding hopes for a convincing global recovery in the second half of the year.
The frosty state of China saw South Korean exports fall for a seventh month in July, while economic growth in Taiwan cooled to its slowest in three years in the second quarter.
"In terms of external demand, loose monetary conditions and lower energy prices should support a pick-up in global activity in the coming quarters," Krystal Tan,
Asian economist at Capital Economics wrote in a report.
"However, the pace of recovery is likely to be gradual, suggesting a strong rebound in Asia's export performance is still some way away."
Providing a bit of relief, manufacturing activity in Japan and India both picked up in July thanks to new orders, though analysts questioned if the momentum can be sustained.
Later on Monday a PMI for the United States will give more clues as to whether the world's biggest economy has healed enough to withstand its first expected increase in interest rates since 2006. (reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=USMPMI%3DECI)
POSITIVE SIGNS IN EUROPE
There were positive signs for activity in Europe, however, which European Central Bank policymakers are likely to welcome. The Netherlands, Spain and Italy all grew at a decent pace, with the latter at its fastest in over four years.
French factories slipped back into contraction, though, while those in Germany registered only modest growth.
"It's not a bad thing to happen - a bit of rebalancing away from the core into the periphery," said Alan Clarke at Scotiabank. "It's doing OK, it should be doing better but there's scope that it will come."
Perhaps unsurprisingly, Greece's survey signalled the steepest downturn in its 16-year history as its banks were shut for most of the month.
Markit's final Eurozone Manufacturing Purchasing Managers' Index was 52.4, comfortably above the 50 level that separates growth from contraction. It beat a preliminary estimate of 52.2 but was just shy of June's 52.5.
British manufacturing growth picked up in July but new orders grew at the slowest pace in nearly a year, suggesting manufacturers would continue to drag on growth.
The Markit/CIPS PMI rose more than forecast to 51.9. That was up from 51.4 in June - its lowest in over two years - but well below an average of 54.3 recorded since April 2013, when Britain's economy was starting its recovery.
With emerging economies on track to post their smallest share of global growth in years the hope is for continued recovery in the U.S. and Britain, but mixed data in recent weeks has added to doubts about whether they are on a sounder and sustainable footing.
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