Concerns over China’s economy increased after a disappointing report on the nation’s manufacturing was released Tuesday. Stock price measures for exchanges around the world fell. Shanghai’s main stock index lost over one percent. Shares in Tokyo lost almost four percent while shares on exchanges in Europe and the U.S. also were down.
China’s official manufacturing index fell to its lowest level since 2012 in August. And a survey by the company Markit said that factory activity was at its lowest level in more than six years.
China is seeking to evolve from an export-driven economy toward one based on services and domestic consumer demand. However, the country is struggling with market reforms meant to make the economy more efficient.
In Tokyo, Japan’s Foreign Minister Tara Aso suggested Tuesday that the Chinese economy should be the main issue discussed at a meeting of the G20 major economies. Speaking in Indonesia, International Monetary Fund Director Christine Lagarde said developing economies should watch for effects of China’s economic slowdown. Ms. Lagarde said that China’s slowdown was not sharp or unexpected. But it is clear, she said, that the country is adjusting to a new growth model.
China has announced many measures to support stock prices, but they have continued to fall. Shanghai’s main stock index has fallen by about 40 percent since June. The government announced new measures to support stock prices on Tuesday. They include policies that support company mergers, cash payments by companies to their shareholders, or dividends, and having state companies buying back their own stock on the market.
