Manufacturing activity slows in January

The sub-index of the official PMI that specifically indicates new orders rose to 51.6 from 51.2 in January, its highest since May 2012, which shows that market demand is continually rebounding, according to the statistics bureau.

However, new export orders contracted with their reading dropping to 48.5 last month, from 50 in December.

"It shows there is still uncertainty on outside demand," said Zhang Liqun, an analyst with the Development Research Center of the State Council.

Zhang added the sector's expansion remained modest partly because of seasonal factors, but also reflected that companies were reducing their output to avoid the serious problems created by over-production.

"China's economy is continuing its stable rebound since the last quarter of 2012, with more balanced demand and supply," he said.

"The economic development quality is improving."

Liu said the slightly weakened PMI suggests the economic recovery will continue to meet hurdles this year.

"But the country's urbanization process and the relatively high level of provincial investment may be able to support faster than 8 percent growth in the first quarter," Liu added.

Qu Hongbin, co-head of Asian Economic Research at HSBC, said: "We see increasing signals of a sustained growth recovery in the coming months: steady investment growth led by infrastructure projects; improving labor market conditions boosting consumer spending; and an ongoing re-stocking process, lifting production growth."

JPMorgan Chase & Co recently upgraded its 2013 GDP growth forecast for China to 8.2 percent from 8 percent.

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