Analysts keep receiving mixed economic signals from the world's second largest economy which spur fresh speculation that the authorities might soon roll out more stimulus.
On Monday the official Purchasing Managers' Index (PMI) showed that China's factory activities rose to a six-month high in May.
The National Bureau of Statistics (NBS) said the closely eyed barometer climbed to 50.2 points, up only slightly from the 50.1 points logged in the previous months. A reading above 50 indicates growth on a monthly basis.
However, the non-manufacturing PMI slid to 53.2 points, down from 53.4 points in April, marking a trough not seen since December 2008.
Chinese export demand decreased, prompting companies to cut jobs which in turn drove worries about a protracted economic slowdown in the world's second-largest economy.
ANZ Bank noted in a statement that the country's economy still faces strong headwinds.
Fresh data released on Monday gave rise to renewed speculation that the Chinese authorities might soon roll out more stimulus, despite having cut interest rate three times in six months.
"We forecast more aggressive policy easing, including a 50 basis-point
reserve ratio cut in the coming weeks," HSBC told Reuters.
With the economy slowing, China has fought persistent deflationary pressures which in turn has kept real interest rates stubbornly high.
