In September, China's factory activity unexpectedly decreased.

• In September, the official manufacturing purchasing managers' index was 49.8, lower than August's 49.1, July's 49.4, and June's 49.5.
• The data slightly beat the 49.5 expected among economists polled by Reuters.
• The manufacturing sector has faced headwinds due to a prolonged economic slowdown and property crisis, which have reduced domestic demand.

In September, China's factory activity contracted for the fifth consecutive month, as the world's second-largest economy struggles to regain its growth momentum.

The official manufacturing purchasing managers' index was 49.8 in September, higher than August's reading of 49.1, but lower than July's and June's readings, according to data from the National Bureau of Statistics released on Monday. A PMI reading above 50 indicates expansion in activity, while a reading below that level points to contraction.

The data slightly beat the 49.5 expected among economists polled by Reuters.

NBS's senior statistician, Zhao Qinghe, stated that the overall economic sentiment has improved, as PMI rose to 49.8%, and manufacturing activities have accelerated, with high-tech manufacturing and equipment manufacturing remaining at the forefront.

According to data released Monday, China's Caixin manufacturing purchasing managers' index was 49.3 in September, down from 50.4 in August.

The manufacturing sector is facing headwinds due to a prolonged economic slowdown, property crisis, and Western restrictions on Chinese exports, particularly electric vehicles.

The latest economic data indicates that China's second-largest economy is facing challenges such as weak domestic demand, a decline in the housing market, and increasing unemployment.

The National Bureau of Statistics released data on Friday showing that China's industrial profits in August dropped by 17.8% compared to the same month last year, marking the largest decline in over a year.

Last month, China's retail sales, industrial production, and urban investment grew at a slower pace than expected, with retail sales increasing by 2.1% and industrial production rising by 4.5% from the previous year.

The Chinese government boosted its efforts to stimulate the country's sluggish economic growth last week by reducing the reserve requirement ratio (RRR) and seven-day reverse repurchase rate. Specifically, the People's Bank of China decreased the RRR by 50 basis points and lowered the seven-day reverse repurchase rate from 1.7% to 1.5%, representing a decrease of 20 basis points.

On Thursday, China's top leaders, led by President Xi Jinping, held a high-level meeting and called for an end to the property decline, while emphasizing the need for stronger fiscal and monetary policy support.

In almost 16 years, Chinese equity markets experienced their best week following the announcements.

This is a developing story. Please check back later for updates.