China's manufacturing activity has contracted for the first time in 32 months as the eurozone debt crisis and a sluggish United States economy hit exports and domestic demand slowed.
The purchasing managers index (PMI) fell to 49 last month, down 1.4 points from October, marking the first contraction since March 2009, the China Federation of Logistics and Purchasing said. A reading of 50 indicates the line between expansion and contraction.
The data was released hours after the China eased monetary policy for the first time in three years, with the central bank cutting the amount of money banks need to hold in reserve to boost lending and counter the slowdown.
It came as Zhu Guangya, a vice finance minister, warned the global economy faces a worse crisis than in 2008, with flagging growth in the US and the eurozone on the edge of recession.
"The current crisis, to some extent, is more serious and challenging than the international financial crisis following the fall of Lehman Brothers," he said.
"At that time, the world economy maintained overall growth and the governments, especially G20 countries, were still able to implement fiscal and monetary stimulus measures ... now, to be honest, some countries have very difficult fiscal situations, and there is limited room to adjust monetary policies."
He urged eurozone nations to act decisively to end the two-year debt crisis.
The official PMI survey showed new orders and new export orders contracting in November, hinting at weakening demand for Chinese-made goods in Europe (Chicago Options: ^REURUSD - news) and the US and in the country's domestic market.
The figures signalled China's economy "would continue to slow", government analyst Zhang Liqun said, while HSBC chief economist Qu Hongbin said the data suggested "growth is set to overtake inflation as Beijing's top policy concern".
Alistair Thornton, analyst at IHS Global Insight, called the data "shocking". He said: "The message is clear: the economy is slowing much faster than expected and the government has stepped into the ring. The loosening campaign has begun."
"We expect this to feed through into slower industrial production growth numbers for November, and slower gross domestic product numbers for the fourth quarter."
Inflation eased in October to 5.5pc, the slowest pace since May, while exports and imports fell. Growth also slowed to 9.1pc in the third quarter from 9.5pc in the previous quarter.