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China's factory output dips, concerns over global recovery

Published on Feb 20, 2014 7:01 PM

LONDON (REUTERS) - China's vast factory sector contracted again this month and the expected acceleration in euro zone business activity failed to materialise, highlighting the fragile state of the global economy.

A survey out of China reinforced concerns of a minor slowdown in the world's second-biggest economy while a sister index underscored an ongoing divergence between France, the bloc's second biggest economy, and the rest of the 18-member currency union.

"The euro zone is most at risk of a global demand shock given the chills emanating from China's deleveraging across emerging markets, North America's current 'frozen' growth patch and the fact that the US is exporting less of its growth to the rest of the world," said Ms Lena Komileva at G+ Economics.

Figures due later on Thursday from the United States are expected to show a marked easing of the pace of growth in its manufacturing industry.

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