China manufacturing activity contracts in August

China's factory activity continued to lose steam in August, suggesting the world's second largest economy faces prolonged downward pressure, official data showed Tuesday.

China's manufacturing purchasing managers' index (PMI) came in at 49.7 in August, down from 50 for July, according to data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

The August reading was the lowest since August 2012.

A reading above 50 indicates expansion, while that below 50 represents contraction.

The production sub-index posted at 51.7 last month, still expanding, but lower from 52.4 for July.

The sub-index for new orders came at 49.7, down from 49.9 for July, indicating grim challenges in demand.