The HSBC China Manufacturing Purchasing Managers' Index fell to a final reading of 49.5 in January from 50.5 in December, HSBC Holdings PLC said on Thursday.
A reading below 50 in the gauge of nationwide manufacturing indicates a contraction from the previous month and above indicates expansion.
New export orders declined for the second straight month and production grew marginally, HSBC said.
The final reading was slightly lower than HSBC's preliminary January PMI of 49.6 published on Jan. 23. The preliminary figure is based on 85% to 90% of responses to its PMI survey.
"Policy makers should pay attention to downside risks and preemptively fine-tune policy to steady the pace of growth if needed," HSBC's chief economist for China Qu Hongbin said.
The HSBC China manufacturing PMI is based on data compiled from replies to questionnaires
sent to purchasing executives at more than 420 manufacturing companies.
Source: WSJ
