The government has taken a more cautious stance on stimulus since commentary in official media last month warned of the risks of growing debt, but analysts said signs of weakness in the latest monthly data may spur policymakers into taking additional steps to support the economy.
"I see rising odds of a cut in RRR (banks' reserve requirements) or even a policy rate cut, before the end of the second quarter," Zhou Hao, senior Asia emerging market economist at Commerzbank said in a note after May activity data on Monday.
With the economy not yet on solid footing, other analysts agreed that more stimulus is likely in coming months.
"The government will likely launch more fiscal policies such as faster approval of infrastructure projects as downside risk to growth heightens," said Raymond Yeung of ANZ in a note.
A major worry for the authorities is the continued decline in fixed-asset investment by private companies.
Overall fixed-asset investment growth fell to 9.6 percent in January-May from a year earlier, missing market expectations of 10.5 percent, which would have been unchanged from Jan-April.
Investment by private firms slowed to a record low, with growth cooling to 3.9 percent from 5.2 percent in Jan-April and double-digits last year. Private investment so far this year has been the slowest since China began publishing the data in 2012.
China needs to open up its state sector further in order to arrest the steep slowdown in private investment, statistics department spokesman Sheng Laiyun told a news conference, adding that falling prices and industrial overcapacity have impacted private investment.
Foreign direct investment in China, meanwhile, declined 1 percent year-on-year in May, the first decline since December, the commerce ministry said on Sunday.
Other data on Monday were more mixed, suggesting the economy may be bottoming out and less at risk of a hard landing but is still struggling to regain traction.
Factory output grew 6 percent in May from a year earlier, the same as in April and marginally better than expected.
Analysts believe industrial output has been supported by a government infrastructure spending spree and a further recovery in the property market.
Investment in real estate in May also posted its first year-on-year slowdown in growth since December, though property sales by area surged more than 32 percent.
Despite a jump in car sales, consumption softened slightly. Retail sales growth, which captures both private and government purchasing, slowed to 10.0 percent on-year. Analysts had forecast it would be unchanged from April at 10.1 percent.
Trade data last week showed a further drop in exports but the smallest decline in imports in more than a year, suggesting domestic demand was picking up.
Consumer inflation cooled, but production price deflation eased markedly, reducing some of the strains on Chinese companies which are battling shrinking profit margins.
Government pledges to cut excess industrial capacity and restructure bloated state-owned enterprises are a major wild card, posing risks to near-term growth and the financial system. But most economists expect Beijing to move slowly, fearing social instability if millions are suddenly thrown out of work.
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