BEIJING, Sept 30, 2021 (BSS/AFP) - Chinese factory activity contracted in

September to the lowest level since February 2020, when coronavirus lockdowns
crippled the economy, official data showed Thursday, as the country faces
waves of power outages and fears over instability in the real estate sector.

  The Purchasing Managers' Index (PMI) -- a key gauge of manufacturing
activity in the world's second-largest economy -- slipped to 49.6 from 50.1
in August, the National Bureau of Statistics said.

  Any figure below the 50-point mark represents contraction, while above it
indicates growth. It is the first time China's PMI has contracted since
February last year, when the domestic economy was battered by prolonged
factory shutdowns caused by the coronavirus pandemic.

  Factory suspensions and power blackouts have already affected at least 17
provinces in recent months -- a situation further exacerbated by tight coal
supply leading to sky-high prices.

  The power cuts and local government restrictions on factories to cut energy
use have led some major banks to lower their annual GDP forecast for China,
with supply chains for international firms such as Apple and Tesla impacted.

  NBS senior statistician Zhao Qinghe said the PMI fell below the threshold
due to "the relatively low prosperity of energy-intensive industries".

  The figure was slightly below the forecast of Bloomberg analysts, who
expected a small rebound after successful containment of coronavirus
outbreaks.

  While China's economy has largely bounced back from the initial blow of the
pandemic, multiple outbreaks in recent months hit domestic tourism and
manufacturing as wide swathes of the country were locked down.

  As a result, China's non-manufacturing PMI -- which measures activity in
construction and services -- contracted in August for the first time since
the pandemic began, but recovered in September to 53.2 from 47.5 last month.

  Default fears around Chinese property giant Evergrande -- bogged down in a
$300 billion debt quagmire -- has hit consumer confidence, as the government
tries to stop financial risk from spilling over into the rest of the property
sector.

  Zhiwei Zhang, chief economist at Pinpoint Asset Management, said that the
weak PMI would serve as an "alarm" for the government.

  "Economic growth in Q4 will likely slow further without a change of
government policies, and the pace of slowdown may pick up," he said.