MercoPress. South Atlantic News Agency

China's factory activity contracts at its fastest in three years in August

The weak data is likely to add to global concerns over China's economy losing steam and could send Asian and global shares down further.

China's factory activity contracted at its fastest pace in three years in August, confirming fears that the country's growth is continuing to slow. The official manufacturing purchasing managers' index (PMI) dropped to 49.7 from 50 in July.

 A figure below 50 indicates contraction. The weak data is likely to add to global concerns over China's economy losing steam and could send Asian and global shares down further.

A separate private Caixin/Markit index also released on Tuesday puts the PMI number even weaker, at 47.3, the weakest reading since 2009.

The fresh economic data is also likely to undermine efforts by Beijing to reassure investors and calm markets.

Chinese mainland stocks have been on a steep downward slope over the past months, shedding almost 40% since June.

Authorities have injected money into the markets, allowed the state pension fund to start buying up shares and lowered lending rates.

So far though, none of those measures have managed to push the markets back into positive territory and analysts have warned that the more Beijing's intervention fails to have an impact, the more likely it is that future ones will be shrugged off by investors.

China has also cracked down on people accused of spreading online “rumors”, and who the authorities say have been “destabilizing the market”.

As a consequence of the latest data the benchmark Shanghai Composite fell by 2.2% to 3,139.05 points in early trade. In Hong Kong, the Hang Seng index was slightly lower by 0.3% to 21,608.78.

Elsewhere in Asia, Japan's Nikkei 225 was down by 1.2% to 18,659.46 points.

Investors across the region were cautious after US stocks closed in the red again, making August its worst month for trading since 2012. Australia's S&P/ASX 200 followed the downward trend and slipped 0.9% lower to 5,160.20 points.

In South Korea, the benchmark Kospi index also fell, slipping 0.5% to 1,932.25 points. Affected by the slowdown in China, Seoul reported on Tuesday that exports fell 14.7% in August from a year earlier, worse than expected and the biggest drop in six years.