China suffers sharpest contraction in factory activity in 6 1/2 years

Beijing

ACTIVITY in China's factory sector shrank at its fastest pace in almost six-and-a-half years in August as domestic and export demand dwindled, a private survey showed, adding to worries that the world's second largest economy may be slowing sharply.

China's surprise devaluation of the yuan last week and a near-collapse in its stock markets in early summer have sparked fears that it could be at risk of a hard landing which would hammer global growth, sending financial markets into a tailspin.

Japanese Economics Minister Akira Amari said on Friday that he expected China's government to take steps to prevent its economic slowdown from becoming a global problem.

The preliminary Caixin/

Markit China Manufacturing Purchasing Managers' Index (PMI) stood at 47.1 in August, well below a Reuters poll median of 47.7 and down from July's final…