China's factory sector grew at its slowest pace in 28 months in June as new orders expanded less quickly, with weaker global demand and tight monetary policy at home pinching production.
Although the moderation in activity did not point to a sharp drop-off in Chinese economic growth for now, the figures were slightly worse than forecast.
That led some analysts to predict China may be less aggressive in tightening monetary policy conditions later this year.
The official purchasing managers' index (PMI), designed to provide a snapshot of conditions in China's vast manufacturing sector, fell to 50.9 in June, below expectations for a reading of 51.3 and down from 52 in May. The 50-point level separates growth from contractions.
A separate PMI survey by HSBC showed growth in overall factory production came close to stalling in June, confirming preliminary findings released last week. Its PMI reading stood at 50.1, with output falling for the first time since July 2010 amid lacklustre demand and power shortages.
With the US economy sputtering and Europe fighting a debt crisis, global investors are especially sensitive to any wobble in activity in China, a bastion of fast growth.
In a sign that China is not insulated from the troubles of its major trade partners, the official sub-index for new export orders in the PMI fell to 50.5 in June from 51.1 in May, reflecting persistent weakness in global demand.
The official PMI showed that new orders and exports orders were still growing, though at a much slower pace than May, while the HSBC PMI indicated new export orders fell for a second straight month.
