The Caixin/Markit manufacturing Purchasing Manager’s Index for March was 50.1.
Analysts polled by Reuters had expected the Caixin/Markit PMI to come in at 45.5, compared with February’s sharpest contraction on record at 40.3.
PMI readings above 50 indicate expansion, while those below that level signal contraction.
On Tuesday, the official manufacturing PMI for March came in at 52.0, beating expectations for a contraction.
Analysts said the official reading on Tuesday showed an expansion after Chinese economic activity came to a halt in February. The PMI readings are sequential.
The Chinese government has implemented large-scale lockdowns and quarantines of millions of people since late January to contain the outbreak of the coronavirus disease, formally known as COVID-19. This restricted movement and economic activity.
Factories are just starting to come online as daily infection numbers slow. China has said most new infections are now from residents returning from other countries.
China’s Ministry of Industry and Information Technology said Monday at a press conference said resumption of work rate for small and medium-sized enterprises nationwide was 76% as of March 28.
The Caixin/Markit survey features a bigger mix of small- and medium-sized firms. In comparison, the official PMI survey typically polls a large proportion of big businesses and state-owned companies.
— CNBC’s Evelyn Cheng contributed to this report.