The Chinese Markit/Caixin manufacturing PMI declined to 48.2 in December from 48.6 in November, missing expectations for a reading of 49.0.

Production fell in December, partly driven by a further drop in total new work. Companies continued to shed their staff.

"The Caixin China General Manufacturing PMI for December is 48.2, down 0.4 points from the reading for November. This shows that the forces driving an economic recovery have encountered obstacles and the economy is facing a greater risk of weakening. More fluctuations in global markets are expected now that the U.S. Federal Reserve has started raising interest rates," Dr. He Fan, Chief Economist at Caixin Insight Group, said.