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Yet there were also worrying signals. The reading for total new orders declined 0.3 of a point to 50.7, while export growth continued to slow for a second consecutive month to 50.0.

Iris Pang, senior economist at French investment bank Natixis, said, "We are skeptical that the expanding purchasing of inputs is a way to keep the zombie companies afloat."

The independent Caixin/Markit PMI, released after the official one, declined by 0.2 from April to 49.2, signaling another month of contraction. "Overall, we think the mixed PMIs are in line with our broad economic view, with rising downside risks to the outlook," chief China economist Chang Jian and her team at Barclays noted in a report. Chang maintains that the economic slowdown will continue "due to capacity reductions, unsustainably rapid credit expansion and high debt burdens, particularly in the corporate sector."

A bottoming-out of the Chinese economy remains elusive. "The PMI readings for May were underwhelming," said Julian Evans-Pritchard, China economist at Capital Economics. "They suggest that activity held up reasonably well last month, but they also offer few signs of improvement."

Evans-Pritchard said he believes "the likelihood that growth could merely hold steady this year is rising."

Neither the glass-half-full nor the half-empty interpretation of the PMIs resonated with investors early on Wednesday. The benchmark Shanghai Composite Index was up by 0.07% in morning trading, from Tuesday's close at 2,918.78. Over in Hong Kong, the Hang Seng Index was down 0.02%, at 20,810.29.□

MARIKO TAI , Nikkei staff writer

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