The China Caixin manufacturing purchasing managers' index (PMI) for January slowed from December, missing a Reuters poll forecast, but continued to show the mainland's economy was recovering.
The reading came in at 51.0 in January, down from December's 47-month record of 51.9 and below a Reuters' poll forecast for 51.8.
A reading above 50 indicates expansion, while a reading below signals contraction.
"The rate of improvement slowed since December, as output and new orders increased at weaker rates amid a further reduction in employment," the Caixin PMI statement said on Friday. "At the same time, inflationary pressures remained sharp, with both input costs and output charges increasing at rates scarcely seen throughout the past five years."
In December, China's PPI (producer price index) climbed to a five-year high, rising 5.5 percent on-year, exiting years of deflation. Producer prices had slumped in recent years amid excess capacity in many industries and a slowdown in global growth. That also signaled not just likely stabilizing economic growth, but also a likely pick up in corporate profits.
The Caixin figures came as China's markets reopened on Friday after closing for the week-long Lunar New Year holiday.
The Australian dollar slipped after the data to as low as $0.7638 from $0.7660 before the release. China is a key market for Australia's exports of raw materials, tying its economic prospects to the mainland.
At least one analyst wasn't overly concerned by what the Caixin PMI's miss might signal.
"Given the volatility we have around Chinese New Year, it's very hard to read. I was expecting something softer for January, but until we get February and March numbers it's really very hard to get a sense of how economic activity is doing," Julia Wang, a greater China economist, told CNBC's "Squawk Box" on Friday.
"They've basically been on holiday over the past two weeks. Most of the construction and construction sites basically ground to a halt in mid-January," she added."That's why the PMIs and activity data in January as a whole are expected to be a little bit softer."
On Tuesday, the official manufacturing PMI came in at 51.3 for January, down a smidgen from 51.4 in December, but still better than a Reuters poll forecast of 51.2.
The official figures tend to focus on larger companies, while the private China Caixin PMI focuses on smaller and medium-sized firms.
The two data points likely confirm indications that the mainland's economy has been recovering recently, but some questioned how long the pickup might last.
"The Chinese economy maintained stable growth in January. But the sub-indices showed that the current growth momentum may be hard to sustain. We must remain wary of downward pressures on the economy this year," Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said in the Caixin statement on Friday.
Others were also concerned about what the data might signal.
"Early indicators for January, including today's PMI release, suggest that the recent recovery remains largely intact for now but has begun to lose steam," Julian Evans-Pritchard, a China economist at Capital Economics, said in a note on Friday. "Given clear signs that the property market is cooling and that monetary and fiscal policy have become less supportive, we expect economic growth to begin to slow again in the coming quarters."
The official non-manufacturing PMI, which takes a reading on the services sector, rose to 54.6 in January from 54.5 in December. Those figures were released on Tuesday.
While the manufacturing PMI data tend to be more closely watched, China's pivot toward domestic consumption and away from manufacturing- and investment-led growth means the service sector, which includes consumer industries such as real estate, retail and leisure, has become the majority of the mainland economy.
It is also a key barometer of consumption, which accounts for more than 50 percent of gross domestic product (GDP).
The figures likely signaled that China's economic growth was stabilizing. Concerns have persisted over the mainland economy's health, as private-sector debt has surged even as the amount of growth from additional debt has declined.
But the economy in recent months has received a fillip from a pickup in the property sector.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1