China's factory activity contracted less than expected in September

Factory activity in China has contracted For the fifth consecutive month in September, the world's second-largest economy struggled to revive its growth momentum.

The official manufacturing purchasing managers' index came in at 49.8 in September, compared with 49.1 in August, 49.4 in July and 49.5 in June, according to National Bureau of Statistics data released on Monday.

A PMI reading above 50 indicates an expansion of activity, while a reading below that level indicates contraction. The data beat expectations of 49.5 among economists polled by Reuters.

NBS senior statistician Zhao Qinghe said overall economic sentiment improved with the PMI rising to 49.8%, and manufacturing activity picked up as high-tech manufacturing and equipment manufacturing advanced.

However, China's Caixin PMI was 49.3, up from 50.4 in August, according to a private survey compiled by S&P Global.

Caixin data released on Monday indicated that China's manufacturing sector experienced its sharpest contraction in 14 months in September, due to weaker demand and a weaker labor market.

The manufacturing sector continues to be a headache as the prolonged economic slowdown and property crisis dampen domestic demand. Meanwhile, Western restrictions on Chinese exports, including electric cars, have raised concerns.

The data is the latest in a string of disappointing Chinese economic signposts. The world's second-largest economy is still struggling with weak domestic demand, a slump in the housing sector and rising unemployment.

China's industrial profits fell 17.8% in August from a year earlier, marking the biggest decline in more than a year, according to data released by the National Bureau of Statistics on Friday.

China's retail sales, industrial production and urban investment grew at a slower-than-expected pace last month, with retail sales rising 2.1% and industrial production rising 4.5% from a year earlier.

Last week, the Chinese government stepped up its efforts to boost the country's sluggish economic growth. The People's Bank of China cut the Reserve Requirement Ratio, or RRR, the amount of cash banks hold as reserves, by 50 basis points. This lowered the seven-day reverse repurchase rate to 1.5% from 1.7%, a decrease of 20 basis points.

China's top leaders also convened a high-level meeting on Thursday, chaired by President Xi Jinping, where they called for an end to asset depletion and stressed the need for strong fiscal and monetary policy support.

Following the announcements, Chinese equity markets rallied, with markets having their best week in nearly 16 years.

This is a developing story. Check back later for updates.