HONG KONG -- A survey says Chinese factory activity expanded in August at a slower rate, suggesting the recovery in the world No. 2 economy is losing momentum.
The HSBC preliminary purchasing managers' index fell to a three-month low of 50.3 from 51.7 in July.
The index is based on a 100-point scaled on which numbers below 50 indicate contraction.
China's economy had been showing signs of revival after a slowdown, with growth edging higher to 7.5 percent in the April-June quarter. But the report on the country's vast manufacturing industry shows the recovery is uneven.
Communist leaders in Beijing have already unveiled small-scale stimulus to prop up growth. HSBC economists said "more policy support is needed to consolidate the recovery."
The final version of the survey is due Sep. 1.
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