Chinese manufacturing has contracted for a tenth straight month, as new export orders started falling again.

The private sector Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) declined to 48.2 in December, below November's reading of 48.6 and in defiance of analyst forecasts of an improvement to 49.

It is the lowest reading in three months and pours some cold water on hopes the Chinese economic slowdown is bottoming out.

After expanding briefly in November, the output sub-index fell back to 48.7, while new orders also fell for the sixth straight month, pointing to a soft outlook.

New export orders also fell back into contraction after two positive months.

The weakness in the sector has seen the employment sub-index fall to 47.3, marking the 26th consecutive month that factories have laid off more workers than they've taken on.

The weak results had an immediate impact on the Australian share market, which fell into the red after having spent most of the morning comfortably ahead.

The ASX 200 index was down 0.2 per cent to 5,283 by 1:02pm (AEDT), although mining and energy companies were holding onto gains from a recovery in commodity prices late last week.

The Australian dollar eased on the data, after holding at 72.8 US cents most of the morning it was down at 72.2 US cents by 1:04pm.