Beijing, Jun 2 (IANS): China's economic downside risks have been aggravated by slowing expansion in the manufacturing sector and weak market demand, China Daily reported Saturday.

This, it said, is reinforcing expectations of more decisive easing actions from the government.

In May, expansion of the manufacturing sector cooled to its slowest in five months, with a lower-than-expected Purchasing Managers Index (PMI) dropping to 50.4 from April's 53.3, according to data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

The PMI in June is likely to fall to less than 50, suggesting contraction in the manufacturing sector.

The latest news from the US and the eurozone points to increasingly difficult expectations for exports, said Yao Wei, China economist with Societe Generale SA.

"The ongoing easing measures are not strong enough to curb the slowdown in economic growth, and the central bank may consider reducing loan interest rates in the near term," the daily quoted him as saying.

"The sharp drop in May was in line with the overall slowing economic expansion," added Zhang Liqun, a senior economist at the Development Research Center of the State Council.

However, a statement on the China Federation of Logistics and Purchasing website denied that the world's second largest economy was entering a new "decline stage", as the PMI data is still above 50.