Markit/Caixin’s survey revealed that overall operating conditions in the Chinese manufacturing sector continued softening in January. 

The Caixin/Markit manufacturing purchasing managers' index (PMI) came in at 48.3 last month on a seasonally adjusted basis, down from the previous month's reading of 49.7. The latest PMI reading was the lowest since February 2016.

Economists’ had predicted the reading to fall to 49.5. The 50 mark divides contraction and expansion. 

According to the survey, the output sub-index declined, highlighting the drag effect of softer demand on production. Meanwhile, the employment sub-index continued to rise moderately despite staying in negative territory as business confidence recorded a slight improvement. On the price front, both gauges for input costs and output charges dropped only slightly.