BEIJING, Dec. 16 -- China's manufacturing activity expanded in December, but growth slowed to a three-month low, according to HSBC'S preliminary purchasing managers' index (PMI) released on Monday.

The HSBC flash manufacturing PMI for December eased to 50.5, compared to 50.8 in November and 50.9 in October. However, the figure still remained above the boom-bust line of 50, HSBC said in a report.

Growth in the new order and new export order sub-indices increased at a faster pace, while employment decreased at a faster rate compared with the preceding month, it said.

According to Qu Hongbin, chief China economist with HSBC, the December HSBC flash manufacturing PMI reading slowed marginally from November's final reading, but stands above the average reading for the third quarter, "implying that the recovering trend of the manufacturing sector starting from July still holds up."

"We expect China's GDP growth to stabilize at around 7.8 percent in the fourth quarter," Qu said.

After the release of the data, the benchmark Shanghai Composite Index fell 1.43 percent to end the morning session at 2,164.75. The Shenzhen Component Index declined 1.53 percent to close at 8,301.11.