A business survey in Beijing shows September marks the 11th straight month of decline for Chinese manufacturing.
Export orders also fell in September at the sharpest rate in 42 months amid weak international demand.
The HSBC Managers Index measures manufacturing activities on a 100-point scale on which numbers below 50 show a contraction. The index for September was 47.9, up slightly from 47.6 in August.
An HSBC economist said the sharper contraction of new export orders and the lingering pressures on job markets mean that Beijing “should step up easing to support growth and employment.” He said “fiscal measures” should play a more important role in China’s economy in the coming months.