Stocks from Sydney to Seoul lost ground Wednesday following the release of Caixin China’s preliminary purchasing managers’ index (PMI), which fell to a six-and-a-half year low of 47 for September.

In Hong Kong, the Hang Seng lost 2.3 percent to close at 21,303. In Tokyo, the Nikkei 225 shed 1.96 percent to end at 18,070. South Korea’s Kospi fell 1.89 percent to end at 1,944. Shanghai’s SSE lost 2.2 percent to end at 3,116.

The same Caixin China PMI in August was 47.3, while the official PMI from China’s National Bureau of Statistics (NBS) for the same month was 49.7. The official PMI for September is due to be released Oct. 1.

A PMI below 50 indicates China’s massive factory sector is shrinking and today’s announcement indicates China is in its seventh consecutive month of contraction.

The release of this preliminary September PMI was particularly disappointing, as many analysts had felt that August would mark the bottoming out of China’s PMI slide.

Last month saw many factories in and around Beijing close in preparation for the capital’s lavish September 3 military parade, commemorating victory over Japan in World War II. There is no similar extraordinary circumstance to excuse September’s poor showing.

“The multiyear low in the PMI confirms the economy will face strong headwinds before finding a new steady state,” economists at Barclays wrote in a note. “We continue to look for more fiscal and monetary easing in Q4 to support growth, but do not expect that to change the economy’s structural softening trend.”

In further bad news for China, the Asian Development Bank on Tuesday cut its estimate for the country’s growth to 6.8 percent for 2015, down from a previous forecast of 7.2 percent and below last year’s 7.3 percent growth rate. The bank expects the world’s second largest economy will grow 6.7 percent in 2016.

But some still believe China’s GDP growth will not be as bad as naysayers are predicting, despite a raft of negative data in recent months.

“We have a growing conviction that GDP may again surprise ‘to the upside’ despite these woeful PMIs, as the expanding services sector is woefully underrepresented in the high-frequency survey/data space,” wrote TD Securities economist Annette Beacher, in a note.

Aside from the growing services sector, another bright spot for the Chinese economy is retail, with China’s NBS releasing data from August that showed retail sales jumping 10.8 percent compared with the same month last year.

Consumption contributed 50.2 percent of GDP growth in 2014. In the first half of this year, it accounted for 60 percent of GDP. That was, according to NBS, up 5.7 percent from the first half of last year.

Fergus Naughton, a senior China analyst at Trusted Sources, said he expects China’s retail sector to continue its 10 percent annual rate of growth into next year.

“This will be driven by key factors including growing urban and rural disposable income; a push by retailers to penetrate further into smaller cities; increasing online retail sales; a recovery in the housing market, and the stabilization of the domestic stock markets,” he wrote.

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