GDP: How far can it fall?

A man looks at the Pudong financial district of Shanghai in this November 20, 2013, file photo. [Photo/Agencies]

HSBC Holdings Plc reported its own manufacturing PMI on Monday, which showed a reading of 49.7 in January, down slightly from the flash reading of 49.8 but up fractionally from 49.6 in December.

"Although output rose slightly and new orders broadly stabilized, staffing levels were cut for the 15th successive month," said a report from the bank.

Qu Hongbin, chief economist in China and the co-head of Asian Economic Research at HSBC, said: "We think demand in the manufacturing sector remains weak and more aggressive monetary and fiscal easing will be needed to prevent another sharp slowdown in growth".

Liu Qian, deputy director of the China Service Department at the Economist Intelligence Unit, said that a sharp growth deceleration is impossible this year, but deflationary pressure is increasing in the manufacturing sector as overcapacity persists.