The world's second largest economy records new two-year low manufacturing index

An independent survey showed Monday, that a key measure of Chinese manufacturing activity plunged to a two-year low in July, the latest data suggesting the world's second-largest economy faces challenges in the third quarter.

According to Business Insider, the final reading of Caixin's Purchasing Managers' Index (PMI) came in at 47.8 for the month, the Chinese media group said in a joint statement with Markit, a financial information services provider that compiled the survey.

The index, which tracks activity in factories and workshops, is seen as a key standard of measure of the country's economic health.

A figure above 50 signals growth, while anything below indicates the opposite.

"July data signalled that the downturn in China's manufacturing sector intensified at the start of the third quarter," Caixin and Markit said in the release.

"Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011."

Business Insider also reports that Caixin took over sponsorship of the PMI survey from British banking giant HSBC from July.

China's economy is a key driver of global growth and it only expanded 7.4 percent last year, the weakest since 1990, and has slowed further this year, growing just 7.0 percent in each of the first two quarters.