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China manufacturing activity falls to two-year low

TOKYO, August 3 (KUNA) -- China's manufacturing activity growth slowed to a two-year low in July, final results of a business survey by Caixin Media Co. and research firm Markit showed Monday. The Caixin China Manufacturing Purchasing Managers Index (PMI), a gauge of nationwide manufacturing activity of the world's second-biggest economy, fell to 47.8 from June's final reading of 49.4 on a 100-point scale, the lowest since July 2013. The final reading was also lower than the preliminary reading of 48.2 released late July.
A PMI reading above 50 percent indicates growth from the previous month, while a reading below 50 represents contraction in China's manufacturing sector. The index is a closely watched barometer of the health of the Chinese economy. "July data signaled that the downturn in China's manufacturing sector intensified at the start of the third quarter", Caixin said in a statement. "Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011", it added. This was the first time that Caixin Media Co. released the PMI since it replaced HSBC as sponsor of Markit's China PMI survey.
The Caixin final PMI came after China's National Bureau of Statistics said Saturday its official PMI for July stood at 50, also down from June's 50.2. The Caixin survey focuses more on smaller manufacturers in the private sector, while the official PMI survey is weighted towards bigger and state-owned firms.(end) mk.ag