China Factory Output Data Hits Stock Markets
Stock markets have fallen on worse-than-expected Chinese factory data showing activity at its weakest for six-and-a-half years.
It (Other OTC: ITGL - news) was the seventh month in a row that the private Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) had fallen.
The unofficial measure was the worst since March 2009 and will raise additional fears that the slowdown in the Chinese economy is more significant than is being officially admitted.
Stock markets across Asia retreated in the wake of the findings and put further pressure on values in Europe following a day in which mining stocks were hammered on the FTSE 100 because of their links to China's problems.
The survey of purchasing managers highlighted weakening on almost every measure.
It found factories were cutting output, prices and jobs while orders fell to a four-year low.
Speaking on the first day of his visit to the US on Tuesday, Chinese president Xi Jinping moved to reassure the world that the economy was under control.
He told business figures in Seattle that China would not manipulate its currency to boost exports, despite the devaluation of the yuan in August that made Chinese exports cheaper.
The country has been trying to break from a reliance on heavy manufacturing and exports to an economy built on stronger domestic demand.
But confidence has been hit by the recent stock market turmoil.
The Shanghai Composite and Hang Seng in Hong Kong both closed more than 2% down on the day following the release of the PMI figures.
Miners have felt the pain of China's slowdown more than most as falling demand for raw materials in China and in other emerging markets can not be offset elsewhere.