A new round of anxieties will likely occur in all nations and global markets as China released its official manufacturing index showing a drop in November, by all means an indicator that the world's second-largest economy is suffering a contraction for the first time since its last under-50-percent reading in nearly three years.

The official Purchasing Managers' Index (PMI) released by the China Federation of Logistics and Purchasing (CFLP) fell to 49 in November from 50.4 in October.

The official data confirmed a preliminary survey by HSBC into China's manufacturing activity, although it was higher by a point. The HSBC survey said China's index slid to 48 on a 100-point scale in November.

"The November PMI dropped further to below the boom-bust line of 50... indicates that the economic growth pace would continue to moderate in the future," Zhang Liqun, a researcher with the Development Research Centre of the State Council, wrote in the CFLP statement.

A reading above 50 indicates the sector is expanding while a reading below 50 indicates a contraction.

The sub-index for new orders fell to 47.8 in November from 50.5 in October, while the sub-index for new export orders dipped to 45.6 in November from October's 48.6, according to the CFLP, suggesting both domestic and overseas new order books are shrinking.

China, whose average growth has been more than 10 per cent for a decade, is now bracing for a slowdown in its economy. The World Bank has predicted China's gross domestic product would fall to 9.0 per cent in 2011 and then further to 8.4 per cent in 2012.