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AKIPRESS.COM - Growth in China's vast factory sector slowed to a three-month low in August as output and new orders moderated, a preliminary private survey showed on Thursday, heightening concerns about increasing softness in the economy, Reuters reports.
The tepid reading came as China's economic growth appears to be faltering again, with recent indicators ranging from lending to output and investment all pointing to weakness.
With conditions looking increasingly unsteady, analysts say more stimulus may be needed in coming months to bolster growth and offset the downdraft from the cooling housing market.
The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 from July's 18-month high of 51.7, missing a Reuters forecast of 51.5.
It was the lowest reading since May, though the PMI stayed above the 50-point level that separates growth in activity from contraction for a third consecutive month.
"Today's data suggest that the economic recovery is still continuing but its momentum has slowed again," said Hongbin Qu, chief economist for China at HSBC.
"We think more policy support is needed to help consolidate the recovery. Both monetary and fiscal policy should remain accommodative until there is a more sustained rebound in economic activity," Qu said.
Losses for most Asian stock markets, including Hong Kong and China, deepened after the PMI survey while the Australian dollar fell. Australia is sensitive to news out of China, its key export market.
A HSBC/Markit sub-index measuring new orders, a gauge of demand at home and abroad, fell to a three-month low of 51.3. The sub-index for output also dropped to a three-month low in August.