China’s manufacturing engine lost further momentum in July and the job market weakened.
The knock-on effects are already being felt farther afield – from a slowdown in Japanese export growth despite a weaker yen to Apple Inc lamenting a rare drop in Chinese demand for its premium brand of gadgets.
“China’s slowdown is starting to become more dangerous,” warned Yasuo Yamamoto, a senior economist at Mizuho Research Institute in Tokyo.
The employment sub-index slid to 47.3 in July, the weakest since the depths of the global financial crisis in early 2009.
“This print could reignite fears of a Chinese hard landing,” said Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore.
“China cannot change its weak economic growth situation due to still weak external demand and overcapacity problems in the domestic market,” said Wang Jian, a senior researcher with the China Society of Macroeconomics.
“China’s economic growth rate will probably fall below 7 percent in the fourth quarter this year and may fall under 6 percent in some quarter next year,” Wang wrote in the China Securities Journal on Wednesday.
Apple reported quarterly revenues from Greater China dived 43 percent from the previous quarter, and fell 14 percent from the same time last year.
“It adds to the concern about the outlook for demand, and brings into question just how strong Chinese commodities demand will be,” said Alexandra Knight, economist at National Australia Bank.