China's first official economic report of the year suggested manufacturing weakened for a fifth straight month in December, the longest such streak since 2009.
The purchasing managers index edged up to 49.7 last month from a three-year low of 49.6 in November, the National Bureau of Statistics said on Friday.
That compared with a median estimate of 49.8 in a Bloomberg survey of economists. The non-manufacturing PMI, meanwhile, rose to 54.4, the highest since August 2014. Numbers below 50 indicate deterioration.
"Growth momentum is stabilising somewhat, however, as the index remained below 50 for five consecutive months, the manufacturing sector is still facing strong headwinds," said Zhou Hao, an economist at Commerzbank AG in Singapore.
"Monetary policy will remain accommodative and fiscal policy will be more proactive."
The purchasing managers index edged up to 49.7 last month from a three-year low of 49.6 in November, the National Bureau of Statistics said on Friday.
That compared with a median estimate of 49.8 in a Bloomberg survey of economists. The non-manufacturing PMI, meanwhile, rose to 54.4, the highest since August 2014. Numbers below 50 indicate deterioration.
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The slight improvement in the country's sluggish manufacturing sector follows stepped-up stimulus including six People's Bank of China interest-rate cuts. Policy makers trying to meet Premier Li Keqiang's goal of about 7 percent growth this year are also facing pressure from employment, which has been steady thanks to a resilient services sector. Economists said the continued contraction portends more monetary and fiscal support.
"Growth momentum is stabilising somewhat, however, as the index remained below 50 for five consecutive months, the manufacturing sector is still facing strong headwinds," said Zhou Hao, an economist at Commerzbank AG in Singapore.
"Monetary policy will remain accommodative and fiscal policy will be more proactive."