China's factory activity contracts less than expected in September — but shrinks for a fifth straight month

China's factory activity contractedfor a fifth consecutive month in September as the world's second-largest economy struggles 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 data from the National Bureau of Statistics released on Monday. 

A PMI reading above 50 indicates expansion in activity, while a reading below that level points to contraction. The data beat the 49.5 expected among economists polled by Reuters.

Zhao Qinghe, senior statistician at NBS, said that the overall economic sentiment has improved with PMI rising to 49.8%, and that manufacturing activities have picked up speed, with high-tech manufacturing and equipment manufacturing continuing to lead.

However, China's Caixin PMI was 49.3, compared to 50.4 in August, according to the private survey compiled by S&P Global. The Caixin data released on Monday indicated that China's manufacturing sector experienced its sharpest contraction in 14 months in September, driven by declining demand and a weakening labor market.

The Caixin series tends to be more tilted towards exporters and private sector firms, Erica Tay, director of macro research at Maybank Investment Banking Group, told CNBC. She added that the plunge in new orders is not unexpected.

"This year, manufacturers have been engaging in fierce price competition, in order to move volume. This tends to incentivize buyers to stock up. The latest data suggests that bargain-hunters have purchased what they need for the near term," said Tay.

Headwinds for the manufacturing sector has continued to mount as a prolonged economic slowdown and property crisis dampen domestic demand.