China is headed for a slowdown and may not be able to pull the world out of its economic rut, projections from the International Monetary Fund and a drop in HSBC's purchasing managers' index indicate.

The International Monetary Fund slashed its GDP projections for China to 9.5 percent this year from last year's 9.6 percent. Forecast for China's 2012 economic growth were likewise lowered to 9 percent from 9.5 percent.

Analysts said the IMF's projection is still above China's target policy of 8 percent. However, it coincided with data that revealed the country's manufacturing industry is slowing.

The HSBC's flash purchasing managers' index for September is at 49.4, down from August's 49.9 and only a notch higher than July's 49.3. All registered below 50 three times in a row, indicative of China's manufacturing slowdown as production output was down, there were no new orders, even export orders showed a decline.

"Growth continues to moderate but the economy is still cooling at a controlled pace. With less dependence on net exports, China's resilient domestic demand should support around 8.5 to 9 percent growth in coming quarters," HSBC economists Qu Hongbin and Sun Junwei said in separate reports in The Toronto Globe and Mail.

An economic slowdown for China will not bode well for exporters Canada, Australia and Brazil. China sources most of its raw materials from the three nations.