Factory activity in China fell to its lowest level in six-and-a-half years in September, according to a preliminary private sector survey announced on Wednesday.

Chinese official newspaper China Daily reported the Caixin Flash China General Manufacturing Purchasing Managers’ Index (PMI) decreased to 47 points in September, down from 47.3 points in August.

A reading below 50 points indicates a contraction.

The Chinese state-run newspaper said the country’s manufacturing “continues to be hampered by rising labour costs and overcapacity”.

News agency Reuters said the survey showed conditions in September deteriorated from August “by almost every measure, with companies cutting output, prices and jobs at a faster pace as orders fell”.

Following the release of the Caixin Flash China manufacturing PMI, China’s Premier, Li Keqiang, called for innovation, China Daily reported.

Speaking on Wednesday in Henan province – during a visit to a mining company – Mr Li called for manufacturers to create a new driving force and stabilise the country’s economic growth through innovation, the newspaper added.