This is for the fifth consecutive month that the index has come in above 50-point mark that separates expansion from contraction.
The manufacturing sector employed less people as the sub-index of employment dropped 0.3 percentage points month on month to 48.5 in December.
China is expected to have grown by close to 7 percent in 2017, but the world's second largest economy is likely to slow in the new year on the back of those measures, highlighted as policy priorities at October's key Communist Party congress.More news: Raiders looking to reunite with Jon Gruden
The survey found production and new orders were only slightly lower than in November but at 54 and 53.4 showed steady growth.
Finally, the Future Output Index signalled the strongest level of confidence in three months, with more than one-in-five survey participants forecasting higher production. Furthermore, the rate of expansion quickened to the strongest since December 2012.
AMP Capital chief economist Shane Oliver said that, under the prevailing conditions, manufacturing's uninterrupted growth in Australia could even run into 2019. It was the first slowdown in growth since early 2016.More news: LG Display creates 88 inch 8K OLED
The figures showed that China's full-year 2017 economic growth would be at about 6.9 percent and around 6.5 percent for 2018, according to the China Federation of Logistics and Purchasing, which compiles the data.
Qu Qing, an analyst at Hua Chuang Securities, said the construction sector has helped bolster the index, indicating that infrastructure investment remains stable, which will help boost overall economic growth in 2018. They also reiterated the government's top policy priorities for the next three years, which include curbing risks, especially financial risks, as well as reducing poverty and pollution.
"For the most part, the manufacturing sector remained stable in November, although some signs of weakness emerged", said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin. PMI for the high-tech sector picked up further to 53.8 in December from 53.2 in November, NBS data showed. The level of new contracts received from overseas - mainly from Asia, the United States and Europe - rose at the fastest rate in the history of the survey.More news: Two arrested for grisly family murder
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