Textile Factory Wuhan China
A textile factory in Wuhan, Hubei province, China. Reuters

The final reading for HSBC's China manufacturing Purchasing Managers Index (PMI) survey was 48.1 for April, lower than a flash reading of 48.3, and little moved from March's 48 reading.

The data suggested that business conditions in the world's second-largest economy continued to deteriorate in April. The 50 threshold divides expanding activity from a contraction.

Beijing will release April trade data on 8 May.

Asian Markets

Downbeat PMI figures weighed on Asian equities on 5 May.

Hong Kong's Hang Seng average was trading 1.33% lower while the Shanghai Composite was down 0.08% at 06:58 GMT.

Singapore's Straits Times index was 0.06% lower while Australia's ASX finished 0/08% higher.

Asia witnessed thin trade with markets in Japan and South Korea shut on 5-6 May for holidays.

Hongbin Qu, chief economist, China & Co-Head of Asian Economic Research at HSBC said in statement: "...The latest data implied that domestic demand contracted at a slower pace, but remained sluggish. Meanwhile, both the new export orders and employment sub-indices contracted, and were revised down from the earlier flash readings. These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum.

"Over the past few days, Beijing has introduced more reform measures which could support growth by inducing more private sector investment. We think bolder actions will be required to ensure the economy regains its momentum."

Capital Economics said in a note to clients: "[5 May's] lower than expected reading is a sign that conditions in the manufacturing sector remain challenging.

"Nonetheless, it is the first improvement in the index since October, which alongside the second successive pick-up in the official manufacturing PMI announced last week, suggests that downward pressure on the economy has eased somewhat."

Barclays Capital said in a note: "The final reading of the April global manufacturing confidence, based on US ISM, China NBS and PMI data from most of the regions (some will be released only early next week, due to holidays), showed an unexpected decline in the global index, to -0.28 from -0.23.

"The details reveal no major surprises for the key regions, though; as indicated by our preliminary reading from last week, based solely on the US, the euro area and China, global sentiment seems to have improved in April."

"However, manufacturing activity in Japan (which was not included in the 'flash' estimate, but will be starting this month, with Markit's newly released 'flash' Japanese manufacturing PMI), dropped significantly in April (presumably reflecting post-VAT hike response), which was sufficient to drive the global index down overall," the British firm added.

Government Data

Results from HSBC's survey contradict those from an earlier government PMI survey.

Activity in China's factories was a tad better in April, over March, but export orders dropped, government data showed on 1 May.

The official PMI rose to 50.4 in April from March's 50.3, the National Bureau of Statistics (NBS) said, the first indicator of a weak start in the second quarter.

The latest government reading was slightly below economists' expectations but remained above the 50 threshold.