China's official Purchasing Managers' Index (PMI) fell to 49.7 in August from the previous month's reading of 50.0, the weakest showing in three years.
Asian shares fell on Tuesday and the dollar struggled after twin surveys showed China's manufacturing sector in the grip of its worst slump in several years, raising fresh fears about the health of its economy.
China's official Purchasing Managers' Index (PMI) fell to 49.7 in August from the previous month's reading of 50.0, the weakest showing in three years.
Separately, the private Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) showed a final reading of 47.3 in August, the lowest since March 2009.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3%, erasing its early gains.The index shed more than 10% in the month of August, its worst monthly performance since 2012, on fears of global fallout from slowing momentum in China.
"The broad based decline in almost all components of the PMI hints the central bank was right in introducing further easing measures on 25 August," said Chester Liaw, an economist at Forecast Pte Ltd in Singapore.
"It is clear that the interest rates and RRR cuts were not only aimed at containing further falls in the SSEC, but to boost activity in the real economy."
China's cooling demand is already taking a toll on the economies of its trade-reliant Asian neighbours.
South Korea reported on Tuesday its exports fell 14.7% in August from a year earlier, worse than expected and the biggest drop in six years.
Losses on Wall Street also soured Asian sentiment after comments from Federal Reserve Vice Chairman Stanley Fischer heightened fears among investors of a potential US interest hike in September.
US stock futures in Asia were down 1.5%.
Japan's Nikkei stock index was down 1.6% in early trade.
The Nikkei lost 8.2% in August, its biggest monthly decline since January 2014.
Chinese shares opened lower, with the Shanghai Composite Index down 1.8% and the CSI300 index down 2.2%.
Both indexes skidded around 12% in August, their third straight monthly decline. China's stock markets have now lost nearly 40% of their value since mid-June despite unprecedented government support steps.
The Australian dollar edged up against its US counterpart, adding about 0.2% to $0.7125 ahead of the Reserve Bank of Australia's latest policy decision at 0430 GMT.
The RBA is considered almost certain to hold interest rates steady and some are expecting a more dovish statement from the central bank amid worries about China, which is Australia's biggest export market.
The US dollar remained under pressure as investors shunned risk and remained wary ahead of US employment data later in the week that could offer clues about the timing of the Fed's long-awaited hike to interest rates.
The greenback was down about 0.2% at 120.92 yen, while the euro rose about 0.4% to $1.1252.
In commodities trading, crude oil futures gave back some of their biggest three-day price surge in 25 years that saw prices soar more than $10 a barrel.
On Monday, oil jumped more than 8% on downward revision of US crude production data and OPEC's expressed willingness to discuss curbs on output.
US crude slipped 3.5% to $47.48 a barrel, while Brent lost 3.3% to $52.37 a barrel.
