In December'20, Activity in China's factory sector grew as the world's second-largest economy sustained its recovery to pre-pandemic levels, however, increasing cost pressures slowed the pace of expansion.
Also, tougher coronavirus control measures in many of its key trading partners in the west could have dented industrial demand, weighing on the recovery.
The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) fell to 53.0 from November's 54.9, with the gauge staying well above the 50-level that separates growth from contraction but missing expectations and easing to the softest pace in three months.
The Caixin PMI reading comes after an official gauge of factory activity, focusing more on larger and state-owned firms, also moderated but remained strong.