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The Chinese preliminary Markit/Caixin manufacturing Purchasing Managers' Index (PMI) decreased to 47.1 in August from 47.8 in July, missing expectations for a decline to 47.7, and hitting a 77-month low.
A reading below 50 indicates contraction of activity.
The output index fell to 46.6 in August from 47.1 in July, reaching a 45-month low. New export orders also declined.
Dr. He Fan, Chief Economist at Caixin Insight Group, said that the index indicates that China's economy "is still in the process of bottoming out".
"But overall, the likelihood of a systemic risk remains under control and the structure of the economy is still improving. There is still pressure on the front of maintaining growth rates, and to realize the goal set for this year the government needs to fine tune fiscal and monetary policies to ensure macroeconomic stability and speed up the structural reform. This will lead the market to confidence and renew the vigour of the economy," he added.
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