"China celebrates a new national holiday on Thursday to honor the 70th anniversary of the end of World War II, with events across the country, a three-day holiday and a martial spectacle that will rumble through the ceremonial heart of the capital. President Xi Jinping ordered up the festivities long before the latest round of economic news, but the timing could hardly be better for the Communist Party as it grapples with a slumping stock market and fears that a slowdown could spur social unrest. The event allows Mr. Xi to push a much bolder nationalist agenda just as the Chinese public is beginning to question the party's main source of legitimacy: its ability to deliver economic growth," The New York Times reports.

Reuters reports, "After a few upbeat days for world markets, concern about China revived after surveys showed its manufacturing sector shrinking at its fastest pace in three years and its services sector also cooling. Asian stocks, particularly in Japan .N225 and Australia , fell overnight, and the gloomy mood extended to Europe. The FTSEurofirst 300 .FTSE dropped 2.3 percent, following its worst month in four years. Futures prices also pointed to Wall Street opening 2 percent lower CLc1. Oil CLc1 fell back $1.5 towards $50 a barrel, halting biggest three-day surge in 25 years. [O/R] "The problem is that we have these brief spells of optimism like we had last week when U.S. GDP was revised up, but the overall theme is still the weakness in China and that is very hard to dispel from markets," said Philip Marey, a strategist at Rabobank in the Netherlands."

"The latest sign of shifting alliances in the Koreas will come this week when the South's leader attends a military parade in Beijing and meets with the Chinese leader, while her counterpart in the North stays at home. The trip by South Korean President Park Geun-hye comes days after she defused a border crisis with the North and forged a deal for reconciliation talks, including a Sept. 7 meeting to arrange reunions of families divided by the inter-Korean frontier. But as North's dictator Kim Jong Un talked about Korean relations being on a path of "reconciliation and trust," Ms. Park's trip illustrates how much Beijing's ties with Seoul have warmed in recent years, putting Pyongyang's traditional alliance with China under strain," The Wall Street Journal writes.