China has been hit by a series of disappointing economic results with factory activity contracting the most in two years. New orders fell dashing hopes that the world’s second-largest economy may be steadying.
A private survey – the Caixin/Markit China Manufacturing Purchasing Managers’ Index – the PMI – dropped to 47.8 in July. That’s the lowest in two years and down from 49.4 in June.
The results which focus on small to mid-sized companies come on the back of the official survey at the weekend with the PMI index falling to 50.
Growth, which reached a peak in early 2014 has seen a slow decline flatlining from March. New orders contracted while factory output shrank for the third consecutive month.
The deteriorating conditions forced companies to cut staffing for the 21st straight month and factories had to reduce selling prices to a six-month low due to increasing competition.
The central bank has already cut interest rates four times since November and repeatedly eased lending rates for banks in aggressive measures to spur spending.