New Delhi, Sept. 1 -- China's factory activity contracted in August, marking five consecutive months of decline, according to an official survey released Sunday, after a trade truce between the U.S. and China was extended for another 90 days.

China's purchasing managers index in the manufacturing sector rose from 49.3 in July to 49.4 in August, indicating the decline slowed from the previous month, the National Bureau of Statistics said. PMI is measured on a scale from 0 to 100, where 50 marks the cutoff between expansion and contraction.

The indices measuring manufacturing, new orders and raw material inventory edged up in the sector. But the index measuring employment saw a slight drop.

The survey results came weeks after U.S. Presid...