Chinese manufacturing activity fell to its lowest in more than six years in the latest sign of the slowdown in the world’s second biggest economy, according to a survey released Wednesday.
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The preliminary figure for its Purchasing Managers’ Index (PMI) came in at 47.0, down from August and missing expectations.
Almost every sub-component of the index, including employment, new orders, and output were decreasing at a faster rate.
The Thomson Reuters/Core Commodity CRB Index, a measure of 19 commodity prices, fell 1 per cent to 194.8 as investors weigh up the strength of China’s economy, which has been slowing in recent months.
Sharp losses on Wall Street overnight were quickly reflected in Asian markets on Wednesday, as traders continued to place bets on a United States rate hike occurring before the turn of the year. The offshore yuan and the Australian dollar both weakened.
Factory output sank to its lowest since the global crisis, and soft orders suggested more weakness ahead. Ms Martin said the manufacturing gauge will be important for the kiwi/Australian dollar cross, with Australian exporters more exposed to a downturn in Chinese manufacturing. The benchmark two-year U.S. Treasury yield fell to 0.67 percent, nearing a two-week low.
“Everyone thinks it’s a market that is declining, but it’s still growing”.
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The PMI survey is closely watched by investors around the world for clues on the health of the Chinese economy, a crucial driver of global growth, as it is the first regular statistic to be announced for each month. Some economists believe current growth is already much weaker than official data suggest. “Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness”.
