China's factory activity stalled in November as output shrank for the first time in six months, a private survey showed on Thursday.
The HSBC flash Purchasing Managers' Index (PMI) for November clocked in at the breakeven level of 50.0 that separates expansion from contraction, compared with a Reuters estimate for 50.3 and following the 50.4 final reading in October.
Overall, new orders picked up slightly but new export orders slowed markedly, dragging on activity. The factory output sub-index fell to 49.5, the first contraction since May.
The Australian dollar eased against the greenback on the news, trading at $0.8607. But shares in China and Hong Kong appear unaffected by the data.
The reading is the latest evidence that the world's second biggest economy continues to lose traction. Recent data on housing prices and foreign direct investments also missed forecasts.
"China is slowing and we think it will continue to slow. A lot of it is structural, and in our view, growth will slow to about 4.5 percent over the next 10 years. We see some sectors that are very challenged; clearly real estate is one," Robin Bew, MD of Economist Intelligence Unit, told CNBC.
Beijing has signaled increased tolerance towards slower growth as the economy transitions away from heavy investments and towards a more sustainable model of consumption-fueled expansion.