The Chinese preliminary HSBC manufacturing Purchasing Managers' Index (PMI) increased to 49.1 in May from 48.9 in April, missing expectations for a rise to 49.3.

A reading below 50 indicates contraction of activity.

The output index dropped to 48.4 in May from 50.0 in April. It was a 13-month low. New export orders also declined.

"Softer client demand, both at home and abroad, along with further job cuts indicate that the sector may find it difficult to expand, at least in the near-term, as companies tempered production plans in line with weaker demand conditions," Markit economist Annabel Fiddes said.

This reading puts more pressure on the Chinese government to implement further stimulus measures.