Hong Kong (CNN) -- China delivered a one-two punch of negative economic data this week, hitting first with an initial report on factory activity falling to a surprise nine-month low and then with interbank lending rates rocketing to a record high.
The gloomy numbers keep fears alive that the world's second-largest economic engine is not just slowing down -- but also seizing up.
China's main seven-day repurchase rate jumped to a record 12% this Thursday, according to CME Group. China's weighted average overnight repo rate hit 13.1% -- the highest in more than a decade.
The rate spikes are a reaction to Beijing's decision earlier this week to withhold new infusions of cash into the markets. One of the central bank's aims is to slow the growth of China's ballooning debt and stop easy access to credit.
The country's total debt is estimated to stand at more than 200% of GDP when debt from the central government, local governments, corporations and households are included, says Swiss bank UBS.
In April, Fitch had warned China of its high debt levels, downgrading the country's long-term currency rating. The ratings agency cited expansion of easy credit and structural weakness in China's economy.
However on Friday, repurchase rates fell on reports that China's central bank had supplied more than $8 billion in new liquidity to ease the current cash crunch.
On June 20, the same day that China's repurchase rates hit record highs, HSBC's June "flash" purchasing managers' index fell to a nine month low of 48.3. A PMI reading below 50 indicates contraction in the country's manufacturing sector as new export orders plunged from major trading partners like the United States and Europe.
Some China watchers fear the country will miss its self-imposed 2013 growth target of 7.5%.
Since June 1, China's benchmark Shanghai Composite Index has fallen 10%.