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Asian Stocks Plummet on Weak Chinese Manufacturing Data

A woman walks past an electronic stock indicator of a securities firm in Tokyo, displaying Tokyo’s Nikkei 225 that lost 327.98 points or 1.58 percent to 20,392.77, Wednesday, Aug. 12, 2015.

Stocks tumbled sharply Friday in China and across Asia after the release of weaker than expected data about Beijing's crucial manufacturing sector.

The Shanghai Composite Index ended down 4.2 percent, extending a slide that saw it lose 11 percent this week. A key Shenzhen index plummeted 5.4 percent.

In Tokyo, the Nikkei share average, Japan's benchmark stock index, closed down 3 percent. Shares were also down in Hong Kong, Seoul, Sydney, Singapore, Taiwan, Bangkok and Jakarta.

In the U.S., stocks also suffered Thursday, with the Dow Jones industrial average and Standard & Poor's 500 both off 2.1 percent. It was Wall Street's worst day in 18 months.

The Asian sell-off intensified Friday after a preliminary version of the closely watched Caixin purchasing managers' index revealed shrinking Chinese factory activity for August.

Investors have also been concerned about further devaluation of China's yuan currency, as well as about whether Beijing will continue to prop up its volatile stock market.

China's economy had already been slowing and there are worries it may not be able to meet its 2015 GDP target of "around 7 percent." That level of growth would be China's lowest in 11 years, but still well ahead of the expansion expected for other major developed economies.

Beijing's surprise devaluation of the yuan this month was seen as an attempt to spur economic growth, since it will make Chinese exports much cheaper in foreign markets.

But any further devaluation risks causing a regional currency war, since many other nations could lower the value of their own currencies in order to protect their own export markets.