If China is truly the world’s growth engine, there is about to be less growth and less reason to be optimistic about the global recovery. HSBC has trimmed its gross domestic product forecasts for China on the heels of weak manufacturing data. The cut is not just for 2013, as 2014 is now looking to have slower growth as well.

For 2013, HSBC now sees growth of “only” 7.4% from a prior 8.2%. Things are looking less robust for 2014 as well, as the firm is now projecting 7.4% growth rather than 8.4% growth. As part of the move, HSBC also downgraded its rating on Chinese stocks to Neutral from Overweight.

Thursday’s move follows HSBC’s release of the Flash Manufacturing Purchasing Managers Index. This fell to 48.3 from 49.2 in May, and the new reading is the lowest level in about eight months. A reading under 50.0 implies economic contraction and the blame was put on weak external demand, destocking at factories and distributors, and moderate domestic demand. In the flash PMI reading we also saw that new orders and export orders down as well.

We are seeing weakness in other emerging market ETFs as well, but the iShares FTSE China 25 Index Fund (NYSEMKT: FXI) is down almost 2% at $32.94. Shares of iShares MSCI Hong Kong Index (NYSEMKT: EWH) are indicated lower as well after the local Hang Seng in Hong Kong fell almost 2.9% in local trading.

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