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The Chinese preliminary Markit/Caixin manufacturing Purchasing Managers' Index (PMI) decreased to 47.0 in September from 47.3 in August, missing expectations for a rise to 47.5, and hitting a 78-month low.
A reading below 50 indicates contraction of activity.
The output index fell to 45.7 in September from 46.4 in August, reaching a 78-month low. New orders, new export orders, employment, output prices and input prices also declined.
Dr. He Fan, Chief Economist at Caixin Insight Group, said that the index indicates that China'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," he added.
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