Fresh data from the National Bureau of Statistics (NBS) on Thursday showed that China's manufacturing Purchasing Managers' Index (PMI) for January was 49.5, slightly up from 49.4 in December.
The slight increase ended month-on-month declines reported in the previous four months in a row, Zhao Qinghe, NBS senior statistician said in a statement.
The PMI, a widely watched indicator, is a survey of businesses in a specific industry about the operating environment. A reading above 50 signals expansion in the sector, while one below 50 represents contraction.
According to the statement, the sub-indices for production and raw material inventories both edged up from December, while those for new orders, employment, and supplier delivery time dropped to different extents.
Large companies saw the manufacturing PMI up 1.2 points to 51.3, whereas the readings for medium-sized and small companies dropped 1.2 and 1.3 points, respectively.
Meanwhile, China's non-manufacturing sector picked up the pace in January. The non-manufacturing Purchasing Managers' Index rose to 54.7 in January from 53.8 in December, well above the 50-point mark that separates growth from contraction.
The NBS said that the upcoming Spring Festival drove the expansion of related industries such as gross sales, transport and tourism.
The fast-growing services sector accounts for more than half of China's economy and has helped buffer the impact of slowing manufacturing.
NBS data aslo showed the the composite PMI, which covers both manufacturing and services activities, ticked up to 53.2 in January, from December's 52.6.