- Zhao Qinghe, an economist with the National Bureau of Statistics
Activity in China's manufacturing sector continued to contract in August, adding to signs that the world's second biggest economy is fast losing steam. The final Caixin/Markit manufacturing purchasing managers' index slid to 47.3 in August, the lowest level since March 2009 and compared with 47.8 in July. At the same time, the official PMI reading slipped to 49.7 last month, hitting the lowest level in three years, and down from 50.0 in July. This is the first time the official gauge has dropped below 50 in six months. China's recent slew of disappointing data has clouded the growth outlook for the second half of the year, with economists now expecting that growth could fall below 7% during the third and fourth quarter. The economy expanded an annual 7.0% in both the first and second quarter. Beijing has stepped up efforts to support growth and fend off deflationary threat, trimming interest rates and the reserve requirement ratio, the amount that banks must hold as reserves, last week. Despite this, economists predict data for August and September to remain subdued as sluggish overseas and domestic has confounded Beijing's efforts. Nevertheless, Chinese Premier Li Keqiang that the nation's economy was showing signs of improvement after a series of measures to underpin growth, though he said the government still needed to do more to ensure that growth did not come up short.
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