HONG KONG (REUTERS) - China's factories notched their strongest growth in activity in two years and Japanese firms order books rose in November, masking concern about the protectionist leanings of US President-elect Donald Trump and an OPEC-induced oil price rally.
Factory surveys produced stronger purchasing manager index (PMI) numbers in China, Taiwan and Vietnam, and while activity in Japan's factories was still growing in November, the pace was slower than in October.
Some analysts cautioned that November might be as good as it gets, as the effects of stimulus measures in some parts of Asia are wearing off.
"The strength in PMI numbers is unlikely to be sustained as much of it can be explained by previous stimulus measures," said Julian Evans-Pritchard, an economist at Capital Economics based in Singapore. "We see increased signs of slowdown in domestic economies, particularly in China."
Mr Trump has already declared his intention to withdraw from an Asia-Pacific free trade agreement once he is inaugurated on Jan 20, and his protectionist comments while campaigning for the presidency could herald problems ahead for the region's export-driven economies.
China's official PMI rose to 51.7 in November from October's 51.2, staying above the 50-point mark that separates growth from contraction on a monthly basis. The index was stronger than economists polled by Reuters had expected and matched a level last seen in July 2014.
But analysts noted a worrying lack of expansion in new export orders for Chinese factories, suggesting the stronger headline number was consequence of demand coming from its frothy property sector, which authorities are trying to cool.
The unofficial Caixin survey showed a more modest increase in activity, perhaps because it focuses on smaller firms which benefit less from government support for the economy.
While growth in activity was slower in Japan, a sub-index for new orders, which measures both domestic and external demand, rose to a 10-month high of 51.1 in November, up from 50.8 in October.
An improvement in the US and European economies could augur well for exporters, but economists said demand is still fragile, and it will be difficult for manufacturers to pass on to customers the cost of higher input materials.
That includes more expensive oil. Crude prices rallied by around 10 per cent after the Organisation of Petroleum Exporting Countries agreed on Wednesday to cut output for the first time since 2008.
Elsewhere in Asia, South Korean factories showed a fourth consecutive month of slowdown underlying a fragile recovery for Asia's fourth-biggest economy.
In Malaysia, whose ringgit currency has fallen sharply due to capital outflows, the PMI fell to a five month low, hurt by falls in production and new orders.
And in Australia, lower business investment has opened the possibility that the economy shrank last quarter for the first time in almost six years.