International News 02 September 2025
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China’s Factory Activity Contracts Again in August Amid Policy Pressure
China’s manufacturing sector remained in contraction in August, with the official manufacturing Purchasing Managers’ Index (PMI) at 49.4, slightly above July’s 49.3 but below the expansion threshold of 50, according to the National Bureau of Statistics. The reading fell short of economists’ expectations of 49.5, underscoring continued weakness in factory output. Meanwhile, the non-manufacturing PMI, which tracks construction and services, edged up to 50.3 from 50.1, signaling modest expansion. The prolonged factory downturn has weighed heavily on China’s economy, which slowed sharply in July despite temporary relief from trade tensions after U.S. President Donald Trump extended tariff suspensions for Chinese goods by 90 days. Additional pressures include extreme weather disrupting construction and travel, as well as a deepening housing market slump. Beijing’s crackdown on excess industrial capacity and efforts to curb price wars have further dampened output, as local governments restrict new investments in oversupplied industries, intensifying deflationary risks.
https://internasional.kontan.co.id/news/pmi-manufaktur-tiongkok-kontraksi-di-agustus-2025
Japan’s Factory Activity Shrinks Again as U.S. Tariffs Weigh on Exports
Japan’s manufacturing sector contracted for a second straight month in August, with the S&P Global Manufacturing PMI coming in at 49.7, below the 50.0 threshold but slightly improved from July’s 48.9. The downturn was driven by weak external demand, as new export orders recorded their steepest fall since March 2024, particularly from key markets such as China, the U.S., and Europe. While factory output contraction eased somewhat, persistent declines in new orders highlighted subdued global demand. Official July data had already shown Japan’s exports plunging at the sharpest pace in over four years, led by a slump in auto shipments to the U.S., alongside a deeper-than-expected drop in industrial production. Tokyo and Washington struck a deal in July to reduce U.S. tariffs on Japanese goods in exchange for Japan’s US$550 billion investment package in the U.S., but uncertainty over implementation continues to cloud the outlook. On the domestic front, manufacturers added workers for the ninth consecutive month in anticipation of potential recovery, yet business confidence slid to a three-month low amid concerns about weak consumer demand, demographic challenges, and tariff burdens. Input costs ticked higher from July’s multi-year lows, but output prices rose at their slowest pace in more than four years, reflecting stiff competition and growing discount pressures.
South Korea’s Factory Activity Contracts for Seventh Month as U.S. Tariffs Bite
South Korea’s manufacturing sector remained in contraction for the seventh consecutive month in August, with the S&P Global Manufacturing PMI edging up to 48.3 from 48.0 in July but still below the 50 threshold. Output fell for a sixth straight month, while new orders declined for the fifth, reflecting weak demand both at home and abroad. Export orders suffered their steepest drop since April, when U.S. President Donald Trump introduced a 10% baseline tariff on all imports. The situation worsened after Washington raised import tariffs on South Korean goods to 15% in August, though the move averted an even steeper 25% hike under a July trade deal. Manufacturers cited the tariff burden and sluggish domestic conditions as key factors weighing on sales and production. Despite the drag on industry, South Korea’s economy posted its fastest growth in over a year in Q2 2025, supported by tech exports and a rebound in consumption. To cushion the impact of tariffs, President Lee Jae Myung’s administration has proposed significant fiscal spending, while the Bank of Korea signaled further monetary easing. Looking ahead, manufacturers remain cautiously optimistic, banking on new product launches and stronger domestic demand to lift activity over the next year. However, concerns persist that U.S. trade policies could continue to dampen external sales and undermine the sector’s fragile recovery.