Continuing weakness in industrial activity is forcing the Chinese government to adopt more aggressive policies to accelerate growth and increase employment, economists said.

The weekend announcement by the People's Bank of China of a second interest rate cut in less than four months coincided with the release of the manufacturing Purchasing Managers Index for February, which edged slightly upward from a 28-month low of 49.8 in January to 49.9.

"Maintaining growth is now the most important task for the leadership," said Lian Ping, chief economist at Bank of Communications.

Expectations that the US Federal Reserve may postpone its interest rate increase until the second half could also push China's rate cut earlier than forecast, he said.

Beijing may be more proactive through the first half of the year to spend more on government-led investment projects and provide more incentives to private investors and consumers, economists said.

February's PMI was still below the median of 50, showing the manufacturing industry is still contracting.

The output subindex slipped to 51.4 from 51.7 in January, meaning slower production growth, while the employment subindex dropped to 47.8 from 47.9, the lowest level since March 2013, indicating fewer new jobs were available.

Some economists have speculated that China's GDP may fall below 7 percent in the first quarter. The People's Bank of China, or China's central bank, announced late on Saturday that it would cut the benchmark interest rate by 25 basis points, after which the one-year lending rate would fall to 5.35 percent and the one-year deposit rate drop to 2.5 percent.

The bank also increased interest rate flexibility by raising the ceiling for the floating interest rate for savings to 1.3 times the benchmark rate, up from 1.2 times. Benchmark interest rates are close to their lowest level in 10 years.

Liu Ligang, chief economist in China at the ANZ Bank, said that China has started a new cycle of monetary easing, and a further 25 basis point cut in the deposit rate could be seen later this year.

In addition, banks' reserve requirement ratio is likely to be reduced by another 100 basis points in 2015, he said.

How an easier supply of money will be used is a concern for some economists.

"Credit growth has continued to diverge from fixed-asset investment and GDP growth, leading many to question its effectiveness in stimulating growth," said Wang Tao, chief economist in China at UBS AG.

The government should accelerate reform to lower taxes and improve administrative services for enterprises, she said.

A report by the Center for Macroeconomic Research of Xiamen University suggested on Sunday that China should further ease the tax burden by reducing indirect taxes while increasing direct taxes to stimulate growth.

"A tax system in which indirect taxes take the majority share encourages enterprises to pass on the tax to consumers and curbs consumer demand. It is also not conducive for income redistribution," the report said.