The purchasing managers' index (PMI) for the sector dipped to 49.5 in August from 49.7 in July, below the 50-point mark that separates expansion from contraction, National Bureau of Statistics (NBS) data showed on Saturday. Chinese state media keep criticizing the U.S. with the weekend news report from Xinhua giving lessons on the "US' futile war", as it said.
China's manufacturing activity index edged down in August amid external uncertainties, but the industrial upgrade continued apace as the country strives to shift the economy to focus on high-productivity industries. At the same time, sentiment regarding the 12-month outlook for output softened to a level that was among the lowest in the series history, with optimism dampened by worries over the future trading relationship of China and the United States, as well as signs of weaker global conditions.
The gauge for future output expectations, which measures how optimistic or pessimistic manufacturers are about their production for the following 12 months, inched down in August, although it remained in positive territory. The slight bump in August was seen as a clear sign of recovery, mainly fueled by enhanced production activity.
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Data on Friday showed India's economic growth hit a 6-year low in April-June, raising chances of the central bank cutting interest rates further at its next meeting. The worldwide PMI surveys have indicated the slowest worldwide GDP growth for three years in recent months, led by falling manufacturing output. The NBS said the official PMI for August came in at 49.5, down from 49.7 in July.
"The US-China trade war is escalating and we're also seeing tensions heighten between Washington and Europe", which could cause the global economy to falter, said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.
"Japan may slide into recession around the time the sales tax hike takes effect", he added.
According to IHS Markit, which compiled the survey, new orders contracted at the fastest pace in over seven years, with a sharp order reduction across the consumer, intermediate and investment goods industries.