Preliminary data shows that manufacturing activity in China continues to slow. The preliminary HSBC China manufacturing purchasing managers index (PMI) fell to 49.4 in September from 49.9 in August. Readings under 50 indicate contraction of manufacturing activity while readings above 50 indicate expansion. However analysts cautioned that the initial data was not cause for concern over a “hard landing” for China’s economy.

China stocks declined fell for the week over fears of slowing growth. The benchmark Shanghai Composite Index fell 0.4 percent to 2,433.16, its lowest level in 14 months, dragged by banks and property developers. The benchmark fell 2 percent for the week, bringing the yearly loss to 13 percent. Local media has stoked speculation that the Chinese government may intervene in the markets. China’s official Securities Times said that the country’s social security fund plans to invest RMB10 billion (USD1.6 billion) in the domestic stock market. However analysts were dubious that the move would do more than create a short-term boost in sentiment.

Luxury automaker Daimler said that luxury car sales growth has slowed in China. Executives said that Mercedes-Benz sales has slowed since the first half of the year, when Mercedes-Benz sales in China grew by 60 percent. The company did not release specific Mercedes-Benz sales figures for July or August, but said that sales for the first eight months of the year grew 41 percent year over year to 123,590 units. Executives from the company’s China unit said that July and August are typically slow months for auto sales in China and that the trend would be more apparent by the end of September. Other luxury brands have reported strong sales in China this year. However analysts expect growth in China’s auto market to slow significantly this year, to about 5 percent from about 30 percent growth in 2010.

Russia’s consumer price index held steady in the week to Sept. 19, bringing the yearly inflation figure to 4.6 percent. This compares to 6 percent inflation in the same period last year, according to data from Russia’s Federal Statistics Service. Good weather conditions this summer led to a strong harvest this year; a drought killed off a third of Russia’s crops in 2010. The data suggests that the country will meet the government’s full-year inflation target of 6 to 7 percent, a new low for the post-Soviet era.

In a sign of rising domestic consumption in Russia, Honda Motor will set up its first assembly plant in Russia, Japanese media reported. The Japanese automaker has reportedly submitted plans to the Russian government and is in talks with officials. The company aims to produce 30,000 to 50,000 automobiles in Russia each year. Honda sold about 18,000 cars in the country in 2010 but faces tariffs of about 50 percent. Honda officials declined to comment on the news.