After a disappointing set of activity data last month, China's economic recovery seems to have lost steam further this month, with the flash purchasing managers' index falling to its weakest level since the global financial crisis. The Caixin China manufacturing PMI came to 47.1 in the flash reading, down from July's 47.8. Both domestic and external demand weakened, weighing on production and pushing up inventories. Labour demand also dropped to the lowest level since January 2009. Analysts at HSBC believe further loosening measures re needed. "We forecast another 25-basis-point policy rate cut and 100-basis-point reserve ratio cut in [the third quarter], possibly in the coming weeks," they said in a note.
