China manufacturing index falls to financial crisis levels

The Caixin preliminary PMI came in at 47, missing expectations and remaining well below the 50 level, which separates expansion from contraction.

“As China has rolled out a slew of pro-growth measures in the past months, China’s domestic demand may have stabilized”.

Sharp losses on Wall Street overnight were quickly reflected in Asian markets on Wednesday, as traders continued to place bets on a U.S. rate hike occurring before the turn of the year.

Reflecting the slowdown in China’s old growth drivers, fixed-asset investment rose at the slowest pace in 15 years in the first eight months of 2015 and industrial production trailed analyst estimates last month. The benchmark two-year U.S. Treasury yield fell to 0.67 percent, nearing a two-week low. “It’s declining growth”, Ken Lousberg said.

The preliminary index for September fell to 47 from the sector’s final PMI reading for August of 47.3.

Policymakers in Beijing have cut interest rates five times since November in a bid to bolster economic growth.

“Patience may be needed for policies designed to promote stabilisation to demonstrate their effectiveness”, said He Fan, chief economist at Caixin Insight Group.

“Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front”, he said. European stocks fell, weighing on the euro, as investors grew wary of the impact Volkswagen’s gaming of emissions testing for its diesel vehicles will have on Germany’s biggest export sector.

Chinese President Xi Jinping added his voice on Tuesday to officials trying to reassure the world that the government was still committed to reforms following its massive intervention to rescue the stock markets and boost growth.