Asia Expot Machine Cracks Wide Open: China, Korea, Taiwan All Contract; Global Manufacturing Update

The Asian mercantilie export-dependent economic model was flawed from the start and is hitting a brick wall, as discussed many times in this blog.

From Mish's Global Economic Analysis:

The Markit South Korea Manufacturing PMI® shows Production Falls at Fastest Rate in Eight Months.

Output contracted at the fastest pace in eight months amid reports of a strike in the auto sector. Moreover, respondents stated that the global recession had adversely affected production. Total new business fell and, although sharp, the rate of contraction was slower than in July. New export business also decreased, though at a slight rate. Panellists stated that weaker domestic demand and a downturn in the global economy had both fed through to the latest contraction in order book volumes.

The Markit Taiwan Manufacturing PMI™ shows Output contracts at steepest pace in the year-to-date.

http://globaleconomicanalysis.blogspot.kr/2012/09/asia-export-machine-cracks-wide-open.html

The HSBC China Manufacturing PMI™ shows Manufacturing sector operating conditions worsened at the sharpest rate in 41 months.

http://globaleconomicanalysis.blogspot.kr/2012/09/china-new-export-orders-drop-most-since.html

From Zero Hedge:

With the US closed today, the rest of the world is enjoying a moderate rise in risk for the same old irrational reason we have all grown to loathe in the New Normal: expectations of more easing, or "bad news if great news", this time from China, which over the weekend reported the first official sub-50 PMI print declining from the magical 50.1 to 49.2, as now even the official RAND() Chinese data has joined the HSBC PMI indicator in the contraction space for the first time since November. Sadly, following today's manufacturing PMI update, we find that the rest of the world is not doing any better, and in fact of the 22 countries we track, 80% are now in contraction territory. True, Europe did experience a modest bounce from multi-month lows of 44 in July to 45.1 in August (below expectations of 45.3), but this is merely a dead cat bounce, not the first, and certainly not the last, just like the US housing, and now that China is officially in the red, expect the next shoe to drop in Europe. Also expect global GDP to eventually succumb to the manufacturing challenges faced by virtually every country in the world, and to post a negative print in the coming months.

http://www.zerohedge.com/news/global-manufacturing-update-indicates-80-world-now-contraction