BEIJING — The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose to 49.7 in February compared with 48.8 in January, HSBC Holdings PLC said on Wednesday.

The index registered a four-month high, but also stood below 50, a level separating expansion from contraction, for the fourth consecutive month.

HSBC chief economist Qu Hongbin said in a statement that growth remains on track for a slowdown despite the marginal improvement caused by increased production after the Chinese New Year.

With no meaningful rebound in domestic demand in sight, and external weakness, more downside risks exist. As inflation pressures continue to ease, the central bank is expected to step up fiscal easing following the first cut in the banks' reserve ratios this year, Qu said.

China's industrial output grew 10.7 percent in 2011, down from 12.1 percent in 2010, the National Bureau of Statistics said on Wednesday.