China's December NBS manufacturing PMI was 49.7, extending contraction of 5 months, despite a small rise from November's 49.6. This small reversal was led by new orders and production.

"we think the subdued PMIs continue to signal weak underlying growth in Q4 and beyond, consistent with our below-consensus views on the outlook. The positive signs that emerged in November may not be long-lasting, and headwinds to the outlook remain", says Barclays in a research note. 

The rebound in industrial production growth could be for some time being, as the overcapacity in industry continues and real estate investment persists to drop.

The subdued PPI inflation meanwhile continues to discourage inventory restocking by manufacturers in weak external and domestic demand. 

"Therefore, we maintain our 2016 GDP growth forecast of 6.0% amid continued headwind from capacity unwinding and destocking, with weaker growth in Q4 2015 expected", added Barclays.