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The Caixin manufacturing purchasing managers index rose to 51.5 in November, compared with 50.3 in October

A private gauge of China’s manufacturing activity signaled that the sprawling sector continued to expand in November, as Beijing’s efforts to revive growth helped stabilize the economy.

The Caixin manufacturing purchasing managers index rose to 51.5 in November, compared with 50.3 in October, according to data released by Caixin Media Co. and S&P Global on Monday. That marked a second straight month of expansion and the fastest pace of growth since June, Caixin said.

A reading below 50 suggests activity is shrinking and one above indicates that it is expanding.

Growth in supply and demand both accelerated last month, with manufacturers’ output continuing to expand as demand strengthened, the survey showed. In a positive sign amid China’s continued struggles with deflation, demand was solid enough that manufacturers raised prices and passed on some costs.

The gauge for total new orders touched a high not seen since February 2023, and external demand also bounced back, in part due to some overseas clients upping purchases after the U.S. election, said Wang Zhe, senior economist at Caixin Insight Group.

Sentiment among manufacturers improved, with business confidence rising to an eight-month high as firms signaled hopes that better economic conditions and government policies can support sales in the year ahead, Caixin said.

That’s a positive development amid rising uncertainty stemming from the prospect of higher U.S. tariffs on imported goods that could spark retaliation that will disrupt global trade.

Despite the upbeat survey readings, Wang noted that the Chinese economy still faces downward pressure, pointing to a continued contraction in manufacturing employment, which indicates that the effect of stimulus has yet to be felt in the labor market.

“While the economic downturn appears to be bottoming out, it needs further consolidation,” and businesses’ confidence in expanding their workforce needs to be strengthened, Wang said.

Sufficient policy buffers will be needed to cushion against economic headwinds at home and abroad. How consistent and effective additional stimulus measures are will merit close attention, the economist said.

Monday’s readings are in line with China’s official gauge for manufacturing activity, which also edged up last month. The official PMI came in at 50.3 in November, up from 50.1 in October, according to data released Saturday by the National Bureau of Statistics.

Signs of better economic growth momentum and bright spots in high-frequency indicators like PMIs could mean that China’s economic growth goal of around 5% for the year is within reach, some economists say. But a more challenging external environment due to potential tariff hikes by the U.S. have added uncertainty to the outlook.

That will sharpen focus on China’s upcoming Central Economic Work Conference in December, where policymakers will discuss the priorities for the world’s second-largest economy in 2025.

Citi economists expect the closely watched event to signal that China will stick to its “around 5.0%” GDP target.

Domestic policy support will be essential once external headwinds start to kick in, they said in a Sunday note, expecting to see supportive monetary and fiscal measures with a focus on consumption.

Building Apple Products Has Become a Side Hustle for China’s Biggest EV Maker

BYD has grown into a top iPad assembler and has put around 100,000 people to work for Tim Cook’s company

Apple AAPL 1.02%increase; green up pointing triangle products say on the box “assembled in China,” leaving the mystery of who did the assembling. Owners of a new iPad might be surprised to learn one of the answers: China’s biggest electric-vehicle maker.

BYD, known globally as Tesla’s most formidable EV competitor, has a second business manufacturing electronics, and it has grown to assemble more than 30% of Apple’s tablets, according to industry executives and analysts.

The Chinese company said it had more than 10,000 engineers and around 100,000 employees dedicated to the “fruit chain,” the local term for Apple’s supply chain.

The combination of brand-name carmaker and contract electronics manufacturer makes sense to BYD executives, who say both businesses draw on the company’s core competence of making precision devices at low cost.

Apple’s rising dependence on two China-based contractors—BYD and iPhone assembler Luxshare—points to the difficulty of shedding Chinese manufacturing. The U.S. push to limit imports from the country is likely to expand in the second Trump administration.

Apple has been diversifying its supply chain to countries such as India and Vietnam and often turns to Chinese partners for expertise.

“We could not do what we do without them,” Apple Chief Executive Tim Cook told Chinese state media on a visit to Beijing in late November, his third to China this year. In the first Trump administration, Cook successfully lobbied the president to exempt electronics including the iPhone from a tariff on Chinese-made goods.

An EV resembles a smartphone on wheels because both rely on batteries, chips and software. The blending of cars and phones is increasingly part of everyday business in China. BYD, which stands for “build your dreams,” supplies parts and contract manufacturing for both.

One client is Xiaomi, a top smartphone maker that ventured this year into sporty sedans. BYD helps assemble the Xiaomi phones and supplies some technology for its cars, Xiaomi founder Lei Jun said in April, describing BYD founder and chairman Wang Chuanfu as a friend.

Another BYD customer is Huawei, which makes both phones and EV software and sometimes displays phones and cars side-by-side in its showrooms.

Cook, on a visit to Shanghai in March, met BYD’s Wang at Apple’s office, where Wang and his staff showed Cook a miniature model of the iPad production system. Cook said on Chinese social media that BYD was among the Apple suppliers “pushing the boundaries of what’s possible.”

For Apple, which abandoned hopes of making its own EV, working with BYD helps it diversify its suppliers away from Foxconn, the Taiwanese assembler that makes the most iPhones and iPads. BYD isn’t in line to assemble completed iPhones, according to industry executives and analysts, but it is taking a bigger role in iPhone parts such as the titanium frame.

BYD has said it also works with Apple’s rival Samsung, supplying hinge-related components to some of Samsung’s foldable phones.

BYD made news recently when its third-quarter revenue of about $28 billion exceeded Tesla’s figure of $25 billion, the first time BYD had come out on top. The feat was possible because of BYD Electronic 285 10.71%increase; green up pointing triangle, the company’s contract-manufacturing arm, which had revenue of about $6 billion in the quarter.

Wang, a chemist by training, started BYD three decades ago as a battery maker, and the company received an investment in 2008 from Warren Buffett’s Berkshire Hathaway, which is also an Apple investor.

In its early days, BYD was often accused of imitation and landed in litigation with global leaders such as Sony and Foxconn. Legal battles between BYD and Foxconn, typically involving allegations of trade-secret theft and employee poaching, date back nearly two decades and continue to this day.

BYD’s relationship with Apple began around 2009, when BYD started processing components, according to a company history published recently. It gradually won Apple’s trust and was tapped to provide structural components such as metal, glass, ceramics and sapphire as well as assembly services, according to the book.

In its 2019 annual report, BYD Electronic highlighted a breakthrough in its business with a major North American client. The company said it had successfully entered the supply chain for the client’s core products and started mass production, a passage that industry insiders said referred to Apple and BYD’s production of iPads.

Today, BYD Electronic, listed separately on the Hong Kong stock exchange, has taken responsibility for some of Apple’s sensitive work, such as titanium parts for the frame of Apple’s latest iPhone Pro models, said Ivan Lam, an analyst with Counterpoint Research. The company likes to boast that its robot drillers can carve patterns on the surface of an eggshell without cracking it.

It has used acquisitions to expand, including the purchase of facilities in two Chinese cities last year from U.S.-based Apple supplier Jabil for about $2 billion.

One of BYD’s responsibilities is helping Apple diversify its China-centric manufacturing, and it has helped Apple in countries such as Vietnam. BYD already makes smartphones in India for brands such as Xiaomi and could expand there if asked by Apple, said Counterpoint’s Lam.

BYD said its next big thing would be developing AI-powered robots together with Nvidia for factories.

“It is like we are raising many fish in a pool, and honestly, we’re not entirely sure which area of the market will mature in the future,” said BYD battery executive Wang Haoyu at an event this year, citing the company founder’s philosophy. “When a fish matures, we can scoop it out.”

Rearming destroyers can take them out of combat for two months. The U.S. wants to fix that

A U.S. Navy destroyer can fire dozens of cruise missiles within minutes. Reloading the deadly warship back in port can take two months. In a war against China, that could be a fatal weakness.

To overcome the delay, Navy engineers pulled a 30-year-old crane out of storage, wired it up to computers, and used it to build a new prototype reloading system called the Transferrable Reload At-sea Method. TRAM, as it is known, promises to slash the time needed for missile reloading, potentially to just days.

“The ability to rearm at sea will be critical to any future conflict in the Pacific,” said Navy Secretary Carlos Del Toro after a recent test of TRAM off the California coast, to which The Wall Street Journal was granted exclusive access.

Until recently, the Navy didn’t feel much need for speed in rearming its biggest missile-firing warships. They only occasionally launched large numbers of Tomahawk cruise missiles or other pricey projectiles.

Now, Pentagon strategists worry that if fighting broke out in the western Pacific—potentially 5,000 miles from a secure Navy base—destroyers, cruisers and other big warships would run out of vital ammunition within days, or maybe hours.

Seeking to plug that supply gap, Del Toro tasked commanders and engineers with finding ways to reload the fleet’s launch systems at remote ports or even on the high seas. Otherwise, U.S. ships might need to sail back to bases in Hawaii or California to do so—putting them out of action for weeks.

Slow reloading has been causing the Navy headaches in the Red Sea. Warships deployed there to defend cargo ships from Houthi rebels in Yemen must sail through the Suez Canal and to ports in Greece or Spain to reload, leaving the fight for extended periods.

“We should have developed this capability fully decades ago,” said retired Navy Admiral James Stavridis. “Again and again, after firing a significant load of Tomahawks…I had to pull my warships off the line to rearm,” said Stavridis, a former Supreme Allied Commander Europe of the North Atlantic Treaty Organization.

The Navy only reloads the launchers from solid ground or in sheltered harbors because it is a delicate operation. Engineers in the 1990s proposed systems for reloading at sea, but available technology wasn’t precise enough to transfer missiles from a platform constantly in motion, such as a ship or floating dock.

The U.S.’s inability to restock missile launchers at sea is notable because America long ago performed engineering feats such as linking spacecraft orbiting the moon. The military routinely refuels military planes soaring above the clouds.

Engineers say that the ocean surface—while more familiar—presents uniquely vexing physics challenges due to currents, wind and the mix of air and water.

Now digital advances including 3-D printing, specialized radar and motion-detectors of the kind found in cellphones, have allowed the Navy to revisit the idea. Newfound urgency is speeding up work toward a solution.

“We are transforming the way we fight,” said Del Toro onboard the USNS Washington Chambers, a supply ship, during the TRAM test.

He watched as crews zip-lined a dummy missile container to the cruiser USS Chosin sailing alongside and as technicians operated the experimental crane to position the 20-foot-long box over the ship’s launch cells.

Del Toro, whose term ends with the Biden administration, wants equipment like TRAM included in ship modernization work planned over the coming years.

Today, the only U.S. warships that can be sustained indefinitely at sea and continue fighting are its 11 nuclear-powered aircraft carriers and nine smaller amphibious assault ships, none of which carry vertical missile silos.

TRAM could increase that number roughly fivefold, taking the total to around 100 warships without building a single new hull.

Until then, the Navy is seeking new rearming sites at friendly ports. In September, U.S. sailors and logisticians for the first time reloaded a missile onboard the USS Dewey, a destroyer, at an allied naval base in Darwin, Australia.

At the Dewey’s deployment base in Yokosuka, Japan, missiles are reloaded from a barge that meets the destroyer at an anchorage in the harbor, but it is a sheltered area and the waters are calm. In a war, ports the U.S. uses in Japan and Guam could be targeted by Chinese missiles, prompting the Navy to seek havens further away.

“If conflict were to erupt, or if something were to happen, being able to go to various different locations around the Indo-Pacific, it makes it much faster for us to reload,” said Cmdr. Nicholas Maruca, the Dewey’s captain.

From the South China Sea, Darwin is a roughly 4½-day journey under normal sailing conditions, compared with a roughly three-week journey to the U.S. West Coast.

Reloading at sea could slash that downtime even further, but it would be a dicey operation. Missiles in their boxes, which resemble slender shipping containers, can weigh more than 6,000 lbs. They must slide smoothly into tightfitting launch cells because jostling could damage delicate guidance systems—or worse.

“These are supersonic rockets. There is a lot of fire and gas involved with this,” Maruca said. “If you drop the missile, that’s not good.”

For decades, the Navy has provisioned its ships on the high seas by sending basic supplies across cables strung between them. It routinely refuels ships using hoses supported in this way.

The connections require the ships to sail at nearly identical speeds, maintaining a constant distance. The equipment is designed so connections can be severed instantly if needed, such as if attacked.

Loading a warship with dozens of missiles using a crane on the supply ship would be dangerously slow. TRAM is designed to make the process faster and safer.

Creating the TRAM mechanism was still challenging. To start work, Navy experts early this year pulled the mothballed 1990s prototype out of storage, disassembled it and drafted digital plans to reverse-engineer it, with help from some archived drawings.

Putting the new plans in a computer simulation, they located the mechanism’s weakest points and added about 300 lbs. of steel reinforcement, said Ryan Hayleck, the project’s technical leader. The Chosin’s deck also needed reinforcing to handle the new load.

Technicians wired up both ships and the crane with sensors to understand how all the elements moved and what stresses they faced, all with the aim of refining designs. Navy Chief Engineer Rear Admiral Peter Small said the scads of data couldn’t have been collected through land-based tests and will guide the next steps.

“It’s safe to say that the TRAM of today is not your TRAM of yesteryear,” said Del Toro.

EU commissioner pitches ‘Europe first’ in response to Donald Trump

Stéphane Séjourné says his ‘biggest fear’ is for the bloc to become ‘collateral victim’ of global trade war

The EU’s new industry chief has called for a “Europe first” strategy for key business sectors, in a bid to prevent the bloc becoming collateral damage in a potential global trade war sparked by Donald Trump.

European Commission vice-president Stéphane Séjourné, a former French foreign minister and close ally of President Emmanuel Macron, told the Financial Times that Europe must act on the “offensive” to promote its strategic business interests and avoid being flooded by heavily subsidised imports from China.

“I fundamentally believe that Europe has everything to gain from being open to the world,” said Séjourné, who is in charge of the bloc’s industrial policy. But “when China says ‘Made in China’ or the US says ‘America First’, we must say: ‘Made in Europe’ or ‘Europe First’”.

The new commission has pledged to restore the bloc’s competitiveness over the next five years, a task that will become harder if US president-elect Donald Trump acts on his threats to slap sweeping tariffs on all imports, tear up trade deals and slash regulations for US businesses.

Séjourné said his “biggest fear” was that Europe would become “a collateral victim of a global trade war”.

“If all the world markets close, the only remaining open market cannot be the European market,” he said. “If the United States closes to Latin America, closes to India, closes to China, the European market cannot be the destination for all the overcapacities in the world, otherwise we will find ourselves in a situation of short-term economic crisis.”

Brussels must send a “firm message to the United States to tell them that, today, we see no reason to devalue our trade discussion and our trade exchanges”, he said. “The new administration must realise that . . . they also have nothing to gain from having a trade war.”

He brushed off criticism that the EU was pursuing a protectionist agenda.

“It’s not at all about protectionism because Europe really has no interest in a global trade war,” he added. “We have a strategic and technological interest to develop our own industries, to create employment and to create growth.”

Séjourné acknowledged the “negative music” about Europe’s economy, which has been hit in recent weeks by lay-offs from carmakers and steelmakers, and the collapse of Swedish electric battery manufacturer Northvolt, which was heralded as the continent’s green transition bellwether.

He said the commission would focus efforts on strategic sectors including steel, car manufacturing and aerospace, as well as clean technologies.

“It will be necessary to do so in a very targeted manner, on important strategic sectors. But you have to do it offensively and not defensively,” he said.

“Historic” industries must be protected because they provide “very important support” for the clean technologies critical to the green transition, Séjourné argued.

“In reality [steelmaking] is strategic because there are no wind turbines without steel. There is no car production without steel,” he said. “So, if we want to develop other industries, we need a steel industry.”

At the same time, clean technologies such as hydrogen and digital technologies could be “plugged in” to the most heavily polluting industries to cut emissions.

The new commission, which took office on December 1, would define the critical sectors in its first 100 days, he said. Another key policy effort would be to finally bring together the bloc’s capital markets to create a better investment environment — a long-standing ambition that has been thwarted by objections from member states.

“We want to give life to a European industrial policy and an economic doctrine, which we have not had so far,” he said. “We have so far had a juxtaposition of different measures that were sometimes not coherent with each other.”

In a major blow to Brussels’ existing industrial strategy, Northvolt, the EU’s best-funded start-up, filed for Chapter 11 bankruptcy last week, resulting in hundreds of millions of euros of losses for investors including Goldman Sachs and the EU itself, which guaranteed about €300mn worth of loans to the company.

Séjourné said he wanted to reassure investors that “Europe will not abandon the battery industry”.

“We must not have remorse for having established this sector, for having helped and subsidised them and above all when they go through a technological problem not let everything we did in the past be destroyed just by the first difficulty,” he added.