Factory activity in China contracted to a three-year low in February as export orders fell at the fastest pace since the global financial crisis, highlighting deepening cracks in an economy facing weak demand at home and abroad.
Even with increasing government stimulus to spur activity, concerns are growing that China may be at risk of a sharper slowdown if current Sino-U.S. trade talks fail to relieve some of the pressure.
The official Purchasing Managers' Index (PMI) fell for the third straight month, dropping to 49.2 in February from 49.5 in January, according to data released by the National Bureau of Statistics (NBS) on Thursday. The 50-mark separates growth from contraction on a monthly basis.
Analysts surveyed by Reuters had forecast the gauge would stay unchanged from January's 49.5.
Manufacturing output contracted in February for the first time since January 2009, during the depths of the global crisis. A breakdown of the survey's findings showed the output sub-index fell to 49.5 from 50.9 the previous month.
Manufacturers also continued to cut jobs, a trend Beijing is closely watching as its weighs more support measures.
