Policymakers have battled to reverse a post-pandemic slump driven by a crisis in the property sector, weak consumption and high government debt.

The Purchasing Managers' Index (PMI) -- a key measure of industrial output -- was 49.1 in December, according to the National Bureau of Statistics (NBS).

A figure above 50 indicates expansion, while anything below that signals contraction.

The PMI stood at 50.1 in December, its third straight month in positive territory after ending a six-month decline in October.

January's slide was "affected by the approaching Lunar New Year holiday and the concentrated return of business employees to their hometowns", top NBS statistician Zhao Qinghe said.

Both production and demand slowed in the run-up to the eight-day public holiday from January 28 to February 4, Zhao said.

Beijing has unveiled a string of aggressive measures in recent months aimed at boosting growth, including cutting interest rates, cancelling restrictions on homebuying and easing the debt burden on local governments.

But economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore full health in China's economy, which has struggled to fully recover since the Covid-19 pandemic.