The Purchasing Managers Index (PMI), a barometer of manufacturing activities, reached 53.9 percent in December, down 1.3 percentage points from November, said the China Federation of Logistics and Purchasing (CFLP). Before dropping in December, the index had been rising for four consecutive months, said the CFLP.

But this still marked the 22nd straight month in which the index was above the boom-and-bust line of 50 percent. The PMI includes a package of indices to measure manufacturing sector performance. A reading above 50 percent indicates economic expansion.

It seems that the manufacturing industry is expanding at a slower pace, said Zhang Liqun, a researcher at the Development Research Center of the State Council.

"The new orders sub-index dropped to 55.4 percent in December, compared with 58.3 percent in November, as stocking demands of enterprises tapered off," he said. "But the macroeconomy is less likely to wither, since exports and investments have been burning hot."

Meanwhile, it is believed the slight drop in PMI will help soothe worries that inflation is getting out of hand in the country.

"Growth is not overheated, and the chance of inflation spinning out of control is unlikely," said Ting Lu, an economist at the Bank of America-Merrill Lynch in Hong Kong. "Policy will be tightened, but don't expect excessive measures."