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.