The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 50.5 in December, compared with a final reading of 50.8 in November, HSBC Holdings PLC said on Monday. The reading reveals a three-month low.

A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction. December's preliminary PMI figure, also called the HSBC Flash China PMI, slowed down marginally from November's final figure, HSBC economist Qu Hongbin said in a statement, according to 4-traders.com. But Qu noted that it remains higher than the third quarter's average level, an implication that the "recovering trend of the manufacturing sector starting from July still holds up."

This points to gross domestic product growth of about 7.8 percent on-year in the fourth quarter. The preliminary PMI reading is based on 85 percent to 90 percent of total responses to HSBC's PMI survey each month, and is issued about one week before the final PMI reading.

HSBC