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China Slowdown More Evident, PMI Falls in July

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello to our viewers all over China.

You're watching “Asia Market Daily”, co-produced by CCTV Business Channel and CNBC, first in business worldwide.

I am Saijal Patel and here are the top stories across Asia today.

China's efforts to tighten measures introduced earlier this year seem to be paying off.

The country's official gauge showed that manufacturing activity expanded at the slowest pace in 17 months in July.

This is the third straight month it has declined.

The slowdown, however, is not as dire as most analysts like CLSA's Fraser Howie had expected.

(SOT) Fraser Howie, Managing Director, CLSA Singapore:

“Probably not as worrying as you think certainly the Chinese numbers for some obscure reason was released yesterday morning, and so, I won't be too worried about it.”

Economists say the decline means it's unlikely that Beijing will take-on any new aggressive tightening-measures later this year.

This is as inflation pressures are expected to ease further.

Separately, the People's Bank of China said it would continue to implement the moderately loose monetary policy that is currently in place.

Qing Wang of Morgan Stanley says a policy shift may be more possible towards the end of the year.

(SOT) Qing Wang, Chief economist for Greater China, Morgan Stanley:

I think by the beginning of Q4, we should see a more meaningful policy shift, in terms of easing control over bank lending, and approval for investment projects, but right now, what we observe today is that some visible softening in policy tone, but no action yet.”

Chinese shares advanced 1.3 percent on those talks that authorities may remain cautious about launching any new tightening measures.

In other parts of Asia, Japan's benchmark Nikkei 225 closed higher by 0.4 percent.

Earnings reports helped support the Nikkei.

Shares of Honda, Japan's third-largest automaker, shot-up after reporting record quarterly profit on Friday.

Honda also raised its fiscal year-net and operating profit outlook.

But currency moves remained a concern, as the greenback remained within striking distance of a 14 year high of around 85 yen it reached in November.

In South Korea the KOSPI closed up 1.3 percent.

Hyundai Motor hit an all-time high amid positive views on its fiscal 2010 earnings.

Australia's S&P/ASX 200 added 1.1 percent

And in M&A news — Australia's Linc Energy has confirmed it's in talks with Indian coal company Adani Enterprises over the possible sale of its coal asset in Queensland.

If confirmed, this would be the largest single purchase by an Indian firm in Australia's mining sector.

Meantime in Hong Kong, investors are waiting on HSBC as it's due to release first-half interim results.

Reports says the banking giant's first-half profit could jump around 60 percent, thanks to a recovery in its U.S. consumer finance business.

The gains we saw today follows a tepid lead from Wall Street after those weaker-than-expected GDP numbers from the U.S.

Some analysts say this indicates markets may be going through a fundamental shift.

(SOT) James Chirnsdale, CIO, Asia Pacific Asset Management:

“We're seeing very big swings in currencies, we're seeing big swings in stock prices, day in day out, so for most investors, it's pretty hard to get a real take on what's happening, I think currency and stock reaction this morning, to the weakened expected GDP figures in the US on Friday night, bode quite well. I’ve said this fairly consistently over time; at some stage we're going to see a fundamental shift by investors away from western industrialized economies to Asia. And I believe that that's exactly what we're seeing right now.”

The earnings season in the U.S. continues.

More than 100 companies in the S&P 500 turn in their report cards.

Plus, will the non-farm payrolls add to the consistently disappointing run of data? What's going to provide leadership? Earnings or the data?

Consumer, media, insurers and financial companies dominate the earnings calendar this week.

Amongst the names reporting: Proctor & Gamble, Kraft, Newscorp, Mastercard and Berkshire Hathaway.

As for the data, payrolls constitute the number one risk event this week.

Consensus expectations calling for a decline of 90-thousand and unemployment to remain stubbornly high at 9.6 percent

Fed chairman Ben Bernanke speaks on Monday on the challenges for the economy and state governments.

Treasury Secretary Timothy Geithner also speaks on Monday on financial reform.

Other highlights on the data calendar include ISM manufacturing data Monday, and ISM non-manufacturing Wednesday.

Personal income is released Tuesday, and consumer credit is reported Friday.

Economists will be watching monthly auto sales Tuesday and chain stores' monthly sales Thursday for clues as to the consumers' willingness to spend.

The European Central Bank and Bank Of England hold rate meetings Thursday.

Well, that wraps up today's business highlights.

I'm Saijal Patel from CNBC.

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