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| China factory activity falls to weakest in over six years | China factory activity falls to weakest in over six years |
| (about 4 hours later) | |
| Factory activity in the world's second largest economy, China, shrank at its fastest pace in more than six years in August. | Factory activity in the world's second largest economy, China, shrank at its fastest pace in more than six years in August. |
| The private Caixin/Markit manufacturing purchasing managers' index (PMI) dropped to 47.1 from 47.8 in July. | The private Caixin/Markit manufacturing purchasing managers' index (PMI) dropped to 47.1 from 47.8 in July. |
| A figure below 50 shows contraction in the sector and one above means growth. | A figure below 50 shows contraction in the sector and one above means growth. |
| As domestic and export demand dwindle, Friday's data is likely to compound global worries that the Chinese economy is set for a continued slowdown. | |
| Friday's reading was the lowest since March 2009, during the depths of the global financial crisis, and the sixth consecutive below the 50-point level. | |
| The Caixin flash PMI is the earliest economic measure of the Chinese economy to be released each month and is closely watched for clues on how growth is faring. | The Caixin flash PMI is the earliest economic measure of the Chinese economy to be released each month and is closely watched for clues on how growth is faring. |
| Earlier in August, China's official economic growth data had shown a further slowdown in the past quarter, expanding 7% compared to a year earlier, its slowest pace since 2009. | |
| In 2014, China's economy grew at its slowest pace since 1990. It expanded by 7.4%, missing its annual growth target of 7.5% for the first time in 15 years. | |
| Since June 2015, stock exchanges on the mainland have seen extreme volatility, undermining investor confidence and leading to government intervention. | |
| Catching a cold? | |
| Nicholas Teo, market analyst with CMC markets, warned that China's slumping economy could dash hopes for a global recovery. | |
| "China today is no longer just the 'factory' of the world. It is an important consumer of the world's products and services. Many companies and industries depend on the Chinese consumers who are now 'disadvantaged' in purchasing power," he said. | "China today is no longer just the 'factory' of the world. It is an important consumer of the world's products and services. Many companies and industries depend on the Chinese consumers who are now 'disadvantaged' in purchasing power," he said. |
| "So when it sneezes', many around the globe may just catch a cold." | |
| Greater China economist Julia Wang at HSBC warned that economic recovery continued to lose momentum with "further policy easing measures from monetary easing to fiscal support needed" to react to the weak trend. | |
| Beijing has struggled to stabilise the country's stock markets after sharp losses in early summer. | Beijing has struggled to stabilise the country's stock markets after sharp losses in early summer. |
| Earlier this month, the central bank stunned global markets by taking steps to devalue the country's currency, the yuan, and allowing it more freedom to fluctuate in line with market developments. | |
| The move was widely seen as an attempt to prop up the country's ailing export sector, making Chinese goods cheaper abroad. | The move was widely seen as an attempt to prop up the country's ailing export sector, making Chinese goods cheaper abroad. |