CHINA'S manufacturing activity may contract for a second consecutive month in June and fall to a nine-month low due to weaker domestic and overseas demand, a survey showed yesterday.

The possible decline further indicated that the recovery of the world's second-largest economy is more fragile than expected and the weak industrial performance may persist, analysts said.

The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of the sector's vitality, fell to 48.3 in June, down from May's final reading of 49.2.

A reading below 50 means contraction.

The index, which is slanted toward private and export-oriented firms, is likely to show June becoming the second month for industrial activities to shrink after expanding for seven straight months.

Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC Holdings Plc, said the manufacturing sector is suffering as external and domestic demand is weakening and destocking pressure is rising.

The component indices showed that new orders declined further to 47.1 in June from 48.7 in May, and production shed to 48.8 from 50.7, the first time it fell below 50 in eight months. New export orders dropped sharply to 44 from 48.9, casting a shadow over China's export outlook, while both input and output prices remained below 50, suggesting weak production and dampened demand for the manufacturing sector.

"China prefers to use reforms rather than stimulus to sustain growth," Qu said. "While reforms can boost long-term growth prospects, they will have a limited impact in the short term."

Qu said he expects slightly weaker growth in the second quarter.

China's economic growth, which slowed to 7.7 percent in the first three months of 2013 from 7.9 percent in the fourth quarter of 2012, has triggered calls for policy easing as inflation has eased in recent months.

On Wednesday, HSBC cut its projection of China's growth to 7.4 percent for both this year and next year, from a previous 8.2 percent for 2013 and 8.4 percent for 2014.

Zhang Zhiwei, an economist at Nomura, said the decline in the HSBC Flash PMI reinforced his concerns over the downside risks to the Chinese economy.

"We maintain our view that policy and liquidity will remain tight, and headline activity indicators such as industrial production and fixed-asset investment will be weak," Zhang said.