China's manufacturing sector eased in June on the back of a slump in new orders. Analysts say China's economy has become more reliant on domestic demand than foreign markets despite external uncertainties. 

Chinese factories churned out less in June than they did in May. The official manufacturing Purchasing Managers' Index stood at 50 in June, weaker than May's 50.1 level.

The index is sitting at the line that separates growth and contraction while the sub indices are more indicative of the economy. The sub indices are showing signs of structural improvements.

"Ferrous metal production and the steel sector fell more than the other areas. Energy-intensive industries were much weaker than overall manufacturing levels," said Zhao Qinghe, senior statistician of National Bureau of Statistics.

Still, the rise in the high end sector could not offset the soft patches seen in traditional plants. What's more, analysts say, external factors are creating clouds.

"The uncertainty from foreign trade would intensify, which undoubtedly would affect China's economy. But generally speaking, China has changed its momentum from external demand to internal drivers. Although there is influence, it would be limited," said Cai Jin, vice president of China Federation of Logistics & Purchasing.

Domestic demand has become the driving force for growth, thanks to the non-manufacturing sectors. The purchasing managers' index shot up to 53.7, solidly higher than that of May.

New orders in the construction sector has now risen for two straight months, reaching a record high in June.

Cai also said, "The new order sub-index in the construction sector gained six percentage points, leading to an investment increase in following months. That would pave the way for growth in the second half of the year."

China has put high hopes in infrastructure construction. Total investment rose 20 percent from January to May and analysts say that with upcoming projects in public welfare and transportation, more funding is expected in the area.