The purchasing managers index (PMI), a readout of the country's manufacturing activity, ended five consecutive months of growth in May and retreated to 50.4 percent from 53.3 percent in April, the China Federation of Logistics and Purchasing (CFLP) said on June 1.

The figures for May showed that although China's economy decelerated, the overall growth trend remained unchanged, as the reading still stood above 50 percent, said the CFLP. A PMI reading of 50 percent demarcates expansion from contraction.

The sub-index for new orders dipped below 50 percent, to 49.8 percent in May, indicating shrinking demand in the manufacturing sector.

The world's second largest economy is likely to further lose steam with a decline in the sub-index for new orders, pointing to even weaker future factory activity, according to Zhang Liqun, a researcher from the Development Research Center of the State Council.

Zhang noted that the economic downshift will be mitigated by government efforts to maintain growth, especially policies aimed at stabilizing investment.