Manufacturing could be at 2-year high this month (2)

Earlier this week, the government also announced plans to encourage mergers in nine industries to improve efficiency and enhance competitiveness.

One of those industries, vehicle manufacturing, will see 90 percent of China's vehicles coming under the control of its top 10 companies by 2015, and five auto centers will be formed.

Such changes have encouraged financial institutions to be more positive about China's economy this year.

Bank of Communications estimated that the country's growth can return to 8.5 percent this year, higher than other estimates ranging from 7.9 to 8.2 percent.

However, China may continue to be affected by the faltering global economy and a cooling domestic property market, according to some analysts.

"Although exports increased at a surprisingly fast pace of 14.1 percent in December, we need time to test its sustainability as the European Union has not produced a cure to its debt crisis," said Xue Jun, an analyst at CITIC Securities Co.

The HSBC Flash China Manufacturing PMI is an estimate of the final data to be released on February 1. It is based on approximately 85 to 90 percent of total PMI survey responses to give a preliminary indication of the final HSBC PMI data.

The official Purchasing Managers' Index, compiled by the China Federation of Logistics and Purchasing, weighted more toward state-owned enterprises, was 50.6 in December, the same as in November.

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