The Chinese economy issued its purchasing managers' index (PMI), which retreated to 51.1 in May, compared with previous months reading of 51.8, the lowest since July 2010, reports Reuters.
Manufacturers continued to reduce inventories amidst slowing new business flows, leading to slower production growth at a 10-month low, Qu Hongbin, chief China economist at HSBC told Reuters.
The current PMI indicates about 13 percent growth in industrial output and 9 percent growth in GDP, Qu said. Policy still focus towards taming inflation and we expect tightening policy to continue in coming months, he added.
High inflation rates are considered to be a threat to the economical growth. The central bank is trying to stop the increasing speed of inflation by imposing tightening policies and increasing interest rates and reserve rate.
A sub-index for input prices in the survey is still indicating a constant price rise after it fell to 60.1 in May.
China is planning to control consumer prices that rose 5.4 percent in March, the most in 32 months.
The flash PMI, compiled by British research firm Markit, is designed to be a snapshot of the final data of the survey, which is released on the first working day of the month.
HSBC has published a flash PMI for China for the fourth month.