China's manufacturing sector continues to show lackluster performance ending 2015 as it contracted for a fifth straight month in December although it picked up slightly from the previous month, the official manufacturing Purchasing Managers' Index (PMI) showed.

The PMI for December was 49.7, the fifth straight month of contraction, although the figure did not come as a surprise for economists surveyed by Reuters.

Like Us on Facebook

A PMI reading of below 50 means a contraction in factory activity while a reading above 50 indicates expansion. The December figure was only fractionally higher from the PMI reading in November, Reuters has reported.

The latest factory data, however, provided a relief for economists who were expecting sharper deterioration, which was what global investors were also expecting prior to the release of the December data.

One economist interviewed by Reuters said the December manufacturing PMI showed a slight pick up, suggesting that growth momentum in China is stabilizing somewhat.

But Zhou Hao, China economist at Commerzbank in Singapore, said in the interview that the country's manufacturing sector still faces strong headwinds.

The manufacturing PMI contraction in December was attributed to the continuous weak domestic and international demand, which has weighed on the country's factories.

Chinese factories were also forced to cut prices of their goods to address excess capacity, thus denting their profits and further adding deflationary pressures in the world' second-largest economy.

Official data showed that export orders dipped for the 15th straight month in December, triggering lower PMI reading even as total new orders was up 50.2 in the said month.

The People's Bank of China, the country's central bank, earlier released a work paper that showed it expects the country's economic growth to cool to 6.9 percent in 2015 from 7.3 percent in 2014. For the 2016, China's economic growth is forecast to ease further to 6.8 percent.

TagsChina PMI, China Factory Sectory, China Factory PMI