China's factory activity slows to three-year low adding concern

TOKYO, Sept 1 (KUNA) -- China's manufacturing activity growth slowed to a three-year low in August, government survey showed Tuesday, suggesting the world's second-largest economy is losing momentum despite a series of stimulus measures by authorities.
The official manufacturing Purchasing Managers Index (PMI) fell to 49.7 on a 100-point scale last month, down from July's 50.0, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said.
The August index slipped below the key 50 percent line for the first time in six months, and the lowest since August 2012.
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.
Caixin Media Co. and research firm Markit separately said its own final PMI for August shrank to 47.3 in August, compare to July's final reading of 47.8, marking the lowest reading since March 2009. The Caixin PMI fell below 50 for the sixth month in a row. The official PMI is weighted towards bigger and state-owned firms, while the Caixin survey focuses more on smaller manufacturers in the private sector.
"Growth momentum was weak in the manufacturing sector," bureau statistician Zhao Qinghe said in Beijing, attributing the PMI decline mainly to the phasing-out of traditional manufacturing, bad weather caused by El Nino, air pollution controls around Beijing, and low commodity prices, according to state-run Xinhua News Agency.
Despite the dreary signs, Zhao said signs of improvements have emerged with steady growth in high-end manufacturing and consumer goods production.
China's economy grew 7.0 percent year-on-year in the second quarter, unchanged from the previous three months. Amid growing fears that the Chinese economic slowdown may have impact on the global economy, China's central bank cut its benchmark interest rates last week after the nation's benchmark stock index saw the biggest one-day percentage loss since 2007. (end) mk.ibi