Asian markets have tumbled in response to the latest Chinese manufacturing purchasing managers’ index (PMI) which fell to a 77-month low in August.
The Caixin/Markit Flash China General Manufacturing PMI was 47.1 in August, according to the latest reading, with any figure below 50 indicating a contraction.
China’s PMI was expected to come in for August at 48.2.
Markets in Asia responded by falling further, with the Shanghai Composite index down 4.2 per cent to 3,509.98, below the last low it reached on July 8.
The Shenzhen Composite index has also taken a tumble, falling 5.4 per cent to 2,039.397.
In Japan, the Nikkei 225 is trading down 2.9 per cent at 19,435.83, while the Topix index is 3 per cent lower at 1,573.01.
Dr He Fan, chief economist at Caixin Insight Group, said: “The Caixin Flash China General Manufacturing PMI for August has fallen further from July’s two-year low, indicating that the economy is still in the process of bottoming out.”
He added: “But overall, the likelihood of a systemic risk remains under control and the structure of the economy is still improving. There is still pressure on the front of maintaining growth rates, and to realize the goal set for this year the government needs to fine tune fiscal and monetary policies to ensure macroeconomic stability and speed up the structural reform.”
