Global Economy: China and Japan Show Signs of Economic Stress -by Bettina Wassener

 The two biggest economies in Asia showed signs of stress on Thursday, with economic data on China highlighting the fragility of the recovery in that country and a sudden 7.3 percent plunge in the Japanese stock market underlining worries about whether the government’s efforts to reignite growth will bear fruit in the long term.

Stock markets fell across the region, in part because of disappointment over a closely watched purchasing managers’ index from China that offered the latest evidence that the Chinese economy is unlikely to pick up steam again any time soon. 

Released by the British bank HSBC and compiled by the research firm Markit, the index slipped from 50.4 points in April to 49.6 points in May, the first time in seven months that it came in below the level of 50, which separates contraction from expansion. 

“The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds,” Qu Hongbin, chief China economist at HSBC, said in a note accompanying the data release, adding that a likely slowdown this quarter cast a shadow over China’s fragile recovery.

Read more: China and Japan Show Signs of Economic Stress - NYTimes.com