The Gap Between Manufacturing Industries In Asia Is Getting Smaller And Smaller.

China and India slowed output growth in December, but the growth rate of South Korea and Taiwan increased, thus narrowing the gap in manufacturing activities between most developing economies and emerging economic giants in Asia.

HSBC (HSBC) and economic consulting firm Markit released on Monday.

In India, HSBC PMI declined slightly from its peak in November, but is still at a high level according to historical standards.

Last week, HSBC just released China's and Japan's PMI data for December. China still showed strong growth, a slight slowdown compared with November, while Japan's manufacturing output shrank by 3 months.

Before that, both China and India showed an accelerating trend and the distance from other emerging economies in Asia was getting farther and farther away: in November, the growth momentum of manufacturing in China and India was strong, while the data in other regions were relatively weak or mild.

PMI data in the euro area show that

Manufacturing activity in the United States also rose for seventeenth consecutive months in December.

The revitalized manufacturing sector in South Korea and Taiwan, coupled with continued growth in India and China and other signs of accelerated economic activity, will exacerbate fears that inflation may rise in Asian countries.

Leif Eskesen, chief India economist at HSBC in Singapore, said the data from New Delhi indicate that the India Central Bank (RBI) will increase interest rates sooner rather than later.

"India's PMI data show that the economy is still growing at a high speed, but this is becoming increasingly difficult to reconcile with a comfortable level of inflation," he said.

The Central Bank of China announced the second rate hike in a few weeks on Christmas day.

If the economic data released in the coming weeks confirm that economic growth is generally recovering, other Asian central banks are expected to do the same.