CHINA'S factory output grew at the weakest pace in nearly six years in August while growth in other key sectors also cooled, raising fears the country is at risk of a sharp slowdown unless Beijing takes fresh stimulus measures.

The output data, combined with weaker readings in retail sales, investment and imports, pointed to a further loss of momentum as the cooling housing market increasingly drags on other sectors from cement to steel and saps consumer confidence, said Reuters.

Industrial output rose 6.9 per cent in August from a year earlier - the lowest since 2008 when the economy was buffeted by the global financial crisis - compared with expectations for 8.8 per cent and slowing sharply from nine per cent in July.

"The August data may point to a hard landing. The extent of the growth slowdown in the third quarter won't be small," said Xu Gao, chief economist at Everbright Securities in Beijing.

"The chances of cutting interest rates and bank reserve requirements have increased. I think they are more likely to cut interest rates," said Mr Xu.

Some analysts believe annual economic growth may be sliding towards seven per cent in the third quarter, putting the government's full-year target of around 7.5 per cent in jeopardy unless it takes more aggressive action.

Reinforcing the tepid economic activity, China's power generation declined for the first time in four years, falling 2.2 per cent in August from a year earlier, and pointing to slackening demand from major industrial users.

China's first-quarter growth cooled to an 18-month low of 7.4 per cent. Beijing responded with stimulus that pushed the pace up to 7.5 per cent in the second quarter, but soft July and August data suggest that boost is waning.

Retail sales climbed 11.9 per cent, lagging forecasts of 12.1 per cent and July's 12.2 per cent, with growth in car sales in particular off sharply, suggesting consumers are more cautious.

Fixed-asset investment, an important driver of economic activity, grew 16.5 per cent in the first eight months from the same period last year, lower than forecasts. Economists polled by Reuters had expected 16.9 per cent growth, slowing from 17.0 per cent in January-July.

Much of the broader decline appears linked to the slowdown in the property market, which is intensifying.