The Purchasing Managers' Index (PMI) for China's manufacturing sector stood at 52.1 percent in June, down 1.8 percentage points from last month, said the China Federation of Logistics and Purchasing.

The PMI index slowed for the second consecutive month, indicating a moderation in the pace of China's manufacturing expansion, said the China Galaxy Securities Co. Ltd.

The PMI includes a package of indices to measure manufacturing sector performance. A reading above 50 percent indicates economic expansion, and below 50 percent indicates contraction. This was the 16th straight month that the index was above 50 percent.

"Since the PMI is based on firm-level surveys, the draconian property tightening measures in China, and the European debt crisis could weigh on manager sentiment. This could in turn impact the survey results," said Lu Ting, a China economist of the Bank of America-Merrill Lynch.

"The June index indicates China's economic growth is at a key stage, turning to stabilization. The foundation for a new round of sustainable growth is forming, and this needs to be consolidated," said Zhang Liqun, a researcher with the Development Research Center under the State Council.