A non-official preliminary purchasing managers index (PMI) released Wednesday indicated that China's manufacturing activity stabilized in February despite another fall in new export order volumes.

The HSBC Flash China Manufacturing PMI rose to a four-month high of 49.7 in February, up from a final reading of 48.8 in January, HSBC Holdings PLC said.

Despite the resilience of the PMI, factory activity in the world's second-largest economy still weakened in February, as a PMI reading above 50 denotes growth, while a reading below 50 suggests contraction.

"Growth remains on a track of slowing down, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese Lunar New Year," said Hongbin Qu, chief economist on China and the co-head of Asian economic research at HSBC.

"With a meaningful rebound for domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth," Qu said, urging the People's Bank of China, the country's central bank, to further loosen its policies after it cut the reserve requirement ratio (RRR) for banks for the first time this year.

The PBOC announced last week that it would cut the RRR for banks by half a percentage point to 20.5 percent, which will go into effect from Feb. 24.

The preliminary HSBC China PMI figure is calculated on 85 percent to 90 percent of total responses to HSBC's PMI survey each month, and is issued about one week before the final PMI reading.

The National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP) are expected to release the official PMI data for February on March 1. The CFLP's PMI is based on a survey of purchasing managers in more than 820 companies in 20 industries.