Asia stocks flounder as China resists stimulus
MANILA, Philippines (AP) - Asian stock markets floundered on Friday as China pressed ahead with industrial restructuring that is partly to blame for slowing growth in the world's No. 2 economy. European markets mostly posted slight gains.
Beijing has ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars, affirming its determination to push ahead with a painful makeover of the economy. That move followed weak manufacturing data on Wednesday.
Communist leaders are trying to reduce reliance on investment and trade. But a slowdown that pushed China's economic growth to a two-decade low of 7.5 per cent last quarter had earlier prompted suggestions they might have to reverse course and stimulate the economy with more investment to reduce the threat of job losses and unrest.
Japan's Nikkei 225 stock average closed 3 per cent down at 14,129.98 as the yen rose against the dollar. Japan on Friday said consumer prices rose in June for the first time in more than a year, an early sign Prime Minister Shinzo Abe's stimulus policies are working, which if sustained could ultimately push interest rates up. There is also nervousness about whether Mr Abe will deliver on his vow to complete all the reforms crucial to ending Japan's long economic slump.