The country's Purchasing Managers Index fell to 53.9 from 55.2 in November, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics, said in a statement Saturday.

A figure above 50 indicates expansion in China's vast manufacturing sector while a figure below 50 represents contraction.

The data confirms a slowdown highlighted by the HSBC's PMI index released Thursday which fell to 54.4 in December against 55.3 in November.

But the bank, which interviewed purchasing managers from over 400 companies, said manufacturing activity during the last quarter was stronger than in the previous two quarters.

China's central bank chief vowed Friday to keep prices stable in 2011, joining other Communist Party leaders in a major charm offensive to ease consumer concerns over inflation.

Inflation reached 5.1 percent in November, its highest level in over two years, exceeding analysts' predictions.

The consumer price index, the main gauge of inflation, stood at 3.2 percent for the 11 months to December, exceeding the government target of three percent for all of 2010.

To combat inflation and property speculation, the Chinese central bank on Saturday raised interest rates for the second time in less than three months, by 0.25 percent.

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