Chinese factories boom while Japan’s are in reverse

The manufacturers in the two largest economies in Asia are developing very differently after the pandemic.

Official figures show that factory activity in China has grown at its fastest rate in more than a decade over the past month.

However, manufacturing activity in Japan contracted in February at the sharpest rate in over two years.

Businesses around the world are balancing reopening as Covid restrictions are eased against soaring costs from energy to workers’ wages.

China’s manufacturing purchasing managers’ index (PMI) rose to 52.6 from 50.1 in January, according to the China Bureau of Statistics. It was the highest monthly reading since April 2012.

PMIs are a measure of economic trends that provide companies, central banks, governments and investors with important information about current and future business conditions.

The PMI is displayed as a number from 0 to 100. A reading above 50 indicates an increase in activity compared to the previous month. A number below 50 indicates a contraction. The further the number is from 50, the greater the change.

China’s much better-than-expected performance came after tight coronavirus measures were eased in the world’s second-biggest economy late last year.

The country endured one of its worst years in nearly half a century in 2022 amid widespread lockdowns and outbreaks of Covid-19.

Meanwhile, in Japan, a February private manufacturing PMI fell to 47.7 from 48.9 in January, marking the fastest decline since September 2020.

The data underscored the major problems facing businesses in the country — the world’s third-biggest economy — including a global slowdown, rising commodity costs and calls for companies to raise wages for their workers to ease a cost-of-living crisis .

The numbers came a day after Japanese government data showed the country’s factories, particularly automakers and computer chip makers, ramped up production in January at the fastest pace in eight months.