China Factory Activity Drops

With demand slowing both at home and abroad, factory activity in China dropped again. Now, with the risk of China missing its growth target of 7.5 percent, the pressure is rising on the government and its central bank to change policy, which will challenge its stated intentions to focus on long-term stability over near-term problems. Markets worldwide have reacted negatively, as the news of a further slowdown in China comes after a Federal Reserve presser yesterday where Chairman Bernanke hinted at an eventual end to asset buying.