Chinese shares rose at the beginning of the trading week, as a potential U.S. rate cut overshadowed the contraction in the country's factory and non-manufacturing activities.

The Shanghai Composite Index added 0.7%, or 25.41 points, to close Monday's trade at 3,914.01. The Shenzhen Component Index jumped 1.3%, or 162.64 points, to 13,146.72.

The U.S. Federal Reserve is expected to trim rates in December, which weakened the U.S. dollar last week but boosted optimism over the Asian markets.

Meanwhile, official data from the National Bureau of Statistics showed that the country's manufacturing activity remained in contraction in November at 49.2, although improving from the prior month's 49. Meanwhile, the non-manufacturing purchasing manager's index dropped to 49.5 in November from 50.1 in October, marking the first contraction in three years.

A private reading also showed contraction within the manufacturing industry. RatingDog's data showed that the manufacturing PMI in the same month fell to 49.9 from 50.6 in October due to softer business growth.

In corporate news, Chengdu Leejun Industrial (SHE:002651) soared 10% after securing a $57.6 million contract to supply equipment to Singapore's Grandway International.

Jiangxi Copper's (SHA:600362, HKG:0358) Shanghai shares surged 9.2% despite London-listed SolGold rejecting the company's two non-binding cash offers.

China Jushi (SHA:600176) rose 5.6% amid plans of its controlling shareholder, China National Building Material (HKG:3323), to raise its holdings in the company by between 125 million yuan and 250 million yuan.