FILE PHOTO: An employee works on the production line of a tyre factory under Tianjin Wanda Tyre Group, which exports its products to countries such as U.S. and Japan, in Xingtai, Hebei province, China May 21, 2019.
(Photo: REUTERS/Jason Lee/File Photo)

The laggard pace at which China's economy has reeled from became worse last month, with factory output at its slowest in over a decade in the midst of heightening American trade pressure and poor local demand.

Manufacturing production was down 4 percent from a year ago, against a median projection of 5.1 percent. Sales on the retail segment grew slightly at 7.4 percent, compared to an estimated 7 percent rise.

Sales on the retail front also dropped, figures on Monday showed, strengthening perceptions that China may likely slash some of its major interest rates in the coming days to avert a further decline in activity.

The market value of shipped industrial exports, in particular, was down 4.4 percent on-year, the first drop for the month since two years ago, based on a Reuters report, underscoring the increasing effect on Chinese factories and other areas of production.

These figures reinforce the notion that commerce leaders' efforts to ease the country's sluggish economy are not sufficient enough as the government struggles with heavy pressures at home and now, rising oil prices.

All this, according to Nomura International Ltd. heightens the possibility that the People's Bank of China will slash its medium-term loan interest anytime this week. Despite a series of growth-lifting measures recently, the world's second-biggest market has yet to normalize, and analysts say China must introduce more stimulus to extricate itself out of the rut.

The Shanghai Composite Index see-sawed between profits and losses before capping the sessions at noon late Friday up 0.1 percent. The mainland's futures contracts on ten-year government bonds pared losses of 0.29 percent to trade almost 1 percent higher.

Growth in consumer goods sales fell to 7.1 percent, the slowest since April, but there was a slight hike in food sales. China's jobless rate dropped to 5.1 percent from 5.1 percent in July.

The economy's record oil price rally following an attack on Saudi Arabia's oil depot could not have come at a worse moment for China and a global market already in the grasp of a downturn.

While the magnitude of the attack will depend on how long the oil price increase lasts, it endangers delicate investor confidence. Saudi Arabia is the biggest single source of China's oil and crude imports, which supplies around 71 percent of total global demand.