China's manufacturing activity may have slumped to an 11-month low in July amid weakening performance in the world's [Hong Kong company registration]second-largest economy, a survey showed today.

The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of operating conditions at private and export-oriented industrial companies, settled at 47.7 this month, down from June's final reading of 48.2.

A reading below 50 means contraction.

The component indices showed that production was at a nine-month low of 48.2 in July, deteriorating from 48.6 a month earlier.

Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC, said the lower reading suggested[Set Up Company Hong Kong] a continuous slowdown in manufacturing sectors due to weaker new orders and faster destocking.

"This adds more pressure on the labor market," Qu said. "As China has recently stressed to secure the minimum level of growth required to ensure stable employment, the flash PMI reinforces the need to introduce additional fine-tuning measures to stabilize growth."

China's economy expanded 7.5 [Hong Kong Company Formation]percent from a year earlier in the second quarter of this year, slowing further from the pace of 7.7 percent in the first three months, reflecting a weakening recovery that may put the government's efforts on reform to the test.