China factory PMI dips below 50

The PMI continued to dip in August to a point below 50 per cent,which shows the manufacturing sector is contracting, Zhang Liqun,an analyst with the State Councils Development Research Centre told state run Xinhua news agency.

The decline in PMI last month showed growth in the worlds second-largest economy remains in a downward movement,falling to 7.6 per cent in the second quarter of 2012,the lowest level in more than three years,Cai Jin,CFLP Vice Chairman said.

The weak external demand remains the biggest factor dragging down Chinas economic growth,while domestic demand has not yet improved, Fan Junlin,an economic researcher at the Agricultural Bank of China,a key state-owned bank said.

The PMI for nine sectors including oil processing,coking,and machinery manufacturing stood above 50 per cent,while sectors such as chemical fibre and metal production contracted,according to the report.

The calculation of the official PMI data covers 820 enterprises.