China's official manufacturing Purchasing Managers' Index (PMI) indicated the industrial sector continued to expand in January, as the mainland economy shows signs of stabilizing.
The manufacturing PMI came in at 51.3 in January, down a smidgen from 51.4 in December, but still better than a Reuters poll forecasting 51.2.
A reading above 50 indicates expansion, while a reading below signals contraction.
The official figures tend to focus on larger companies. The private China Caixin PMI, which focuses on smaller and medium-sized firms, is out February 3.
The official non-manufacturing PMI, which takes a reading on the services sector, rose to 54.6 in January from 54.5 in December.
The Australian dollar (Exchange: AUD=) slipped as low as $0.7560 after the data, compared with around $0.7576 before the release. China is a key market for Australia's commodity exports.
While the manufacturing PMI data tend to be more closely watched, China's pivot toward domestic consumption and away from manufacturing- and investment-led growth means the service sector, which includes consumer industries such as real estate, retail and leisure, has become the majority of the mainland economy.
It is also a key barometer of consumption, which accounts for more than 50 percent of gross domestic product (GDP).
The figures likely signaled that China's economic growth was stabilizing. Concerns have persisted over the mainland economy's health, as private-sector debt has surged even as the amount of growth from additional debt has declined.
But the economy in recent months has received a fillip from a pickup in the property sector.
Andy Xie, an independent economist and former chief Asia-Pacific economist at Morgan Stanley, told CNBC's "Squawk Box" on Wednesday that China's economy "obviously" was quite strong.
"Since the middle of last year, the economy has experienced a very big recovery," Xie said, noting that electricity consumption had risen sharply.
But he added, "The issue is, is it healthy? And unfortunately that is not true because we see the currency is under pressure and the forex reserves are falling a lot and the government has to use controls to stop the outflow," he said. "I think China's problem is not growth, it's quality of growth."
In January, China reported that its foreign exchange reserves fell for a sixth straight month in December, declining by $41 billion for the month, to $3.011 trillion, the lowest since early 2011. Policymakers have shored capital controls in an effort to stem outflows.