The official index measuring China's industrial activities declined for the fourth straight month in July although it still registered an expansion. By contrast, a similar gauge by HSBC pointed to a contraction for the first time in one year.

The official Purchasing Managers Index, a comprehensive gauge of manufacturing activities across the country, lost 0.2 percentage points from a month earlier to 50.7 in July, the China Federation of Logistics and Purchasing said today. The performance was the weakest since March 2009.

Meanwhile, the HSBC China Manufacturing Purchasing Managers Index, which is slanted more towards privately-owned and export-oriented firms, fell from June's 50.1 to 49.3 in July, also a 29-month low, signaling a deterioration in the manufacturing sector.

A reading above 50 indicates an expansion in both surveys, and below 50 means a contraction or deterioration.

"While July's official PMI was better than expected, it reinforced a trend of moderate growth under the weight of tightened monetary policy," said the Australia and New Zealand Banking Group in a note. However, it said the July PMI tended to be one of the weakest in a year and was usually followed by a strong rebound.

"As industrial production regained growth in June, we believe the PMI will also start to climb in the coming months," the bank said.

The output index under the official PMI lost 1 percentage point in July and contributed the most to the moderation.