China manufacturing output remains weak in March

Worker in a steel factory in China There is growing concern among investors that the Chinese economy is slowing down

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Official data from the Chinese government showed that manufacturing expanded slightly in March.

A final reading of the official purchasing managers' index (PMI) was 50.3 in March, up from an eight-month low of 50.2 in February.

Any reading above 50 indicates expansion.

However, a separate survey by HSBC and Markit saw a contraction in Chinese manufacturing activity, with a reading of 48.0 - the lowest since July.

The figures underscore a growing concern among investors, analysts and government officials that the Chinese economy is slowing.

Last week, China's premier Li Keqiang acknowledged that there were "difficulties and risks", as rising debt and ongoing pollution problems cloud China's economic outlook.

Both Hong Kong's Hang Sen and the Shanghai Composite index declined slightly after the data was released, before recovering.

Japan worries

Separately, a long-awaited tax increase took effect in Japan on Tuesday. It is the country's first tax increase since 1997.

The move, which will see sales tax rise from 5% to 8%, is intended to combat the country's rising debt as its population ages.

Prime Minister Shinzo Abe has said the move is necessary, even though many analysts have warned it could lead to a slowdown in the world's third-largest economy.

Separate data on Tuesday on business sentiment indicated that those concerns are shared by the Japanese business community.

The results of the Tankan survey, which polls more than 10,500 Japanese companies about their business outlook, indicated that Japanese firms were not optimistic about the rest of the year.

Although the survey showed that business sentiment was still at a six year high, large manufacturers' outlook for the rest of the year declined 6 points to a one-year low of 8, which was well below forecasts.

The outlook of non-manufacturing firms also fell, indicating ongoing business wariness about the impact of the tax increase.

The benchmark Nikkei exchange was barely changed on Tuesday, however, as investors had been anticipating some business wariness around the planned tax increase.

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