Factory activity in China shrank for a fifth month in March, aggravating fears of a slowdown in the world’s second-largest economy. Initial results from Markit and HSBC’s manufacturing purchasing managers’ index (PMI) slowed to 48.1 from 49.6, representing a further fall in the sector as any score under 50 represents contraction. Losses in mainland Chinese stock markets accelerated slightly after the data were released in mid-morning trade, with the Shanghai Composite Index slipping 0.4 per cent at midday. “Weakening domestic demand continued to weigh on growth, as indicated by a slowdown in new orders which came in at a four-month low,” said HSBC economist Hongbin Qu. “External demand remained in contraction territory, but the decline was at a slower pace, implying that there are no improvements in the demand outlook.