The mainland's vast manufacturing sector contracted for a second month in December as demand at home and abroad slackened, a purchasing managers' survey showed yesterday.
The HSBC purchasing managers' index inched up to 48.7 in December from 47.4 in November, but still short of the 50 threshold that indicates expanding manufacturing.
'While the pace of the slowdown is stabilising somewhat, weakening external demand is starting to bite,' said Qu Hongbin, China economist at HSBC.
'This, plus the ongoing property market corrections, adds to calls for more aggressive action on fiscal and monetary fronts to stabilise growth and jobs.'
Huo Deming, a professor at the China Centre for Economic Research at Peking University, said the reading showed a lack of confidence in the business community towards the country's economy.
'Compared with 2011, China's economy is facing more uncertainties,' Huo said, adding that if the central government did not use more stimulus policies and continued restrictive regulations on housing purchases, growth next year would be about 8.5 per cent.
Huo said managers were worried the European debt crisis would deteriorate and that the US economic recovery would falter.