The Purchasing Managers' Index, an important indicator of the economy and market, landed at 50.1 in December, according to the country's official statistics agency.
The figure is slightly lower than what the market had predicted, according to a survey from Bloomberg. At the same time, the expansion phase is the longest the country's industry has shown since March last year.
An index value above 50 traditionally indicates increased activity, while an index value below 50 indicates a decline.
The corresponding index for the service sector landed at 52.2, which was significantly above expectations and the highest level since March.
Weak domestic demand and a prolonged property crisis have contributed to an unexpectedly tough economic development in China, the world's second-largest economy. The authorities have responded with more economic stimulus measures to get the machinery going.
