Chinese business activity expanded at a slower pace in December 2019, private survey data compiled by IHS Markit and Caixin showed.

The Caixin China Composite Output Index, which gauges activity in the country's manufacturing and service sectors, fell to 52.6 in December from a 21-month high of 53.2 in November. A reading above 50 represents expansion.

The Services Business Activity Index dropped to 52.5 in December 2019 from a seven-month high of 53.5 in November, after seasonal adjustments. The corresponding index for manufacturing activity dipped to a three-month low of 51.5 from 51.8 in the previous month.

Growth in new business across both sectors eased to a four-month low, and new export business grew at the slowest rate in three months. Employment increased only slightly as factories saw no change to staffing levels, while backlogs of work rose at a slightly faster pace.

Manufacturing firms had a generally positive outlook for the year ahead, while the level of optimism among service providers reached the second-lowest level on record amid ongoing trade tensions, relatively subdued economic growth and staff shortages.

Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said the "phase one" trade deal between China and the U.S. "should be able to help corporate sentiment recover."