The Caixin/Markit manufacturing purchasing managers’ index (PMI) fell from 47.3 in August to 47 in September, missing expectations of a 47.5 reading.
A figure below 50 suggests contraction in manufacturing, while above 50 indicates expansion.
Asian stocks have fallen in early afternoon trade on Wednesday on the news, with the Shanghai Composite down 1.95 per cent, Japan’s Nikkei 1.96 per cent lower and Hong Kong’s Hang Seng down 2.93 per cent.
The data came the day after the Asian Development Bank lowered its growth forecasts for Asia’s developing economies on the back of growth slowing down in China and India.
Just last week, the Organisation for Economic Co-operation and Development (OECD) said slump in China poses a major threat to the global economy, especially if financial markets deteriorate further.
The Federal Reserve, meanwhile, decided last week to keep interest rates at near zero, citing turmoil in China as one reason.
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August inflation figures released earlier this month showed the producer price index falling 5.9 per cent, indicating spare capacity in the economy, while the consumer price index rose two per cent.
Likewise, imports and exports in China both fell in August. Exports have been hit by weak global demand, while imports have been constrained by the slowdown in China’s domestic economy.
However, speaking at the World Economic Forum earlier this month in Dalian, China, Chinese Premier Li Keqiang said China was on track to meet its economic targets and implement financial reforms.