The Caixin Flash China PMI for September fell to 47.0 from 47.3 in August  The number is the lowest it has been in 78 months.

Commenting on the Flash China General Manufacturing PMI data, Dr. He Fan, Chief Economist at Caixin Insight Group said:

The Caixin Flash China General Manufacturing PMI for September is 47.0, down from 47.3 in August. The decline indicates the nation’s manufacturing industry has reached a crucial stage in the structural transformation process. Overall, the fundamentals are good. The principle reason for the weakening of manufacturing is tied to previous changes in factors related to external demand and prices. Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front. Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness.

A figure below 50 signals contraction in the manufacturing sector. There has been concern for nearly a year that China’s GDP growth has dropped well below the government’s target of 7%. That, among other things, has caused wild swings in China’s stock markets. It also has driven concern that the entire global economy has slowed. China is the second largest nation in the world based on gross domestic product, trailing the United States.

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