China quietens as factories hum across Asia

Chinese factory activity softened in December but manufacturing purchasing managers' indexes in Asia continued to gain momentum as euro zone manufacturers ended 2020 on a high.

China's Caixin/Markit Manufacturing PMI fell to 53 from November's 54.9, dragged down by weaker output and new orders, with the gauge staying well above the 50-level that separates growth from contraction but easing to the softest pace in three months.

China's official manufacturing gauge fell to 51.9 in December from a three-year high of 52.1 in the previous month, the National Bureau of Statistics said. Still, with China's factory growth starting to ease after expanding strongly in recent months, production in the rest of the region could cool going forward.

In Japan, the PMI rose to 50 in December, its highest reading since April 2019, according to Jibun Bank and IHS Markit. Taiwan's PMI jumped to 59.4, its highest mark in a decade, while South Korea's remained at 52.9, its third consecutive month above the 50 level that separates contraction from expansion.

Manufacturers in the eurozone had activity in the sector increasing at its fastest pace since mid-2018 and Germany was again the driving force and in contrast to the bloc's dominant service industry. IHS Markit's final Manufacturing PMI rose to 55.2 in December from November's 53.8, although that was below the initial 55.5 "flash" estimate.