China’s manufacturing sector this month suffered its biggest shrinkage in six and a half years, the latest sign of malaise in the powerhouse economy. A closely watched independent survey, the Caixin China General Manufacturing Purchasing Managers’ Index, dropped to 47.1 in the first three weeks of August, down from 47.8 in July, sending domestic markets reeling as much as 5.6 per cent in the course of the day. The Shanghai Composite closed down 4.3 per cent, while the Shenzhen B share index ended the day down 3.8 per cent. The number suggests a slump in China’s crucial manufacturing sector is accelerating. A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction. As they struggle with the worst domestic slowdown since the global financial crisis and the fallout from a bursting equity bubble, China’s leaders have said they want to shift the country’s economic model to one driven more by consumption and services, rather than manufacturing and infrastructure investment.