Asia’s average manufacturing PMI for 9–October was higher than in 7–August. Excluding China, new orders were near an eight-month high, and the export recovery spread from technology products to non-technology products; China’s domestic demand remained weak.
AI investment is driving South Korean exports and economic growth in Taiwan, while Citi also sees mounting financing pressures in non-AI emerging markets. China’s PMIs broadly weakened in October, while the Bank of Japan held interest rates steady.
Taiwan’s third-quarter economic growth and South Korea’s industrial production in September both exceeded expectations. JPMorgan believes technology exports, non-technology exports and domestic investment are jointly supporting growth, but inflation and policy pressures differ across economies.
Asia’s investment cycle does not rely solely on AI, and exports and balance sheets also provide a buffer against high interest rates. But if oil prices remain above 120 dollars per barrel, central banks raise rates more than expected and AI investment declines, pressure on growth will increase markedly.
