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By Tony Munroe
January 2, 2012 8:42 AM EST
Asian factory output remained weak in December, with Chinese manufacturers narrowly avoiding contraction and South Korea's industrial production shrinking the most in almost three years, while Europe data this week is expected to point to a recession.
India, however, saw strong factory activity in December that defied recent weakness in Asia's third-largest economy.
Meanwhile, housing and jobs data from the United States last week showed the world's largest economy gaining momentum heading into the New Year.
Export-reliant Taiwan saw its manufacturing sector contract for the seventh straight month, according to the HSBC Taiwan Purchasing Managers' Index for December, but the rate of decline slowed.
"Although production and new business inflows are still declining, the pace of deterioration eased across the board for the second straight month," HSBC economist Donna Kwok said of the Taiwan data on Monday.
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"Half a year of inventory de-stocking means that a small boost for production could be around the corner soon," she said.
Worries have grown that China, the world's second-largest economy, is headed for sharply slower growth, undermining its ability to offset looming recession in debt-laden Europe and an uncertain U.S. recovery.
China's official purchasing managers' index, released Sunday, edged up to 50.3 in December from 49 in November.
Similar data released on Friday -- the HSBC Purchasing Manager's Index, designed to preview the state of Chinese industry before official output data are published -- showed manufacturing inched up to 48.7 in December from a 32-month low of 47.7 in November, but fell short of the flash reading of 49.
This added to expectations that Beijing will take policy measures to support growth.
China is widely expected to announce a cut in the required ratio of reserves it demands commercial banks hold, after cutting it by 50 basis points on November 30 from a record high of 21.5 percent.
That was the first cut in RRR for commercial lenders in three years, a policy shift after a vigorous tightening campaign to curb inflation which hit a three-year high of 6.5 percent in July.
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Graphic: Asia PMI - http://link.reuters.com/caz75s
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