Disappointing Report on China's Economy Shakes Markets

BEIJING, Worries about China's economic growth were sharpened by a disappointing report on that nation's huge manufacturing sector Tuesday, sparking another global stock sell-off.

In London and New York, shares lost 3 percent, while Paris and Germany dropped around 2.4 percent.  Prices on the Shanghai market fell drastically at Tuesday's open, but regained some strength to close at a loss of just over 1 percent, as Chinese officials insisted the situation was under control.

China's official manufacturing index for August fell slightly to its lowest level since 2012.  A survey by Markit, which focuses on smaller private firms, showed factory activity at the weakest performance level in 6½ years.

China is evolving from an export-driven manufacturing economy toward one based more on services and domestic demand. The world's second-largest economy also is struggling with market-oriented reforms intended to make it more efficient and productive.  

China has been an engine of economic growth for many years, so changes, and setbacks there, ripple through the global economy, affecting stock and commodity prices in particular.