A preliminary survey of factory managers showed, on Thursday, that manufacturing activity in China recovered strongly in August from the lowest level in 11 months, various news outlets reported.
The climb, thanks largely to a rebound in new orders, has added to signs that the world's second-largest economy is now gaining strength following a two-quarter slowdown.
The HSBC flash manufacturing Purchasing Managers Index, or PMI, hit a four-month high of 50.1 in August, up from a 47.7 final reading in July, CNBC reported.
The number was higher than all 16 estimates in a Bloomberg News survey. A number higher than 50 indicates an expansion.
According to Bloomberg, domestic demand fueled the gain after Premier Li Keqiang rolled out measures -- tax breaks for small businesses and an increase in railway investment, for example -- to support growth.
An index of export orders slid more rapidly, which reveals limits on the boost that China can expect from overseas orders as the U.S. Federal Reserve considers winding back stimulus, Bloomberg added.
"China's manufacturing growth has started to stabilize on the back of modest improvements of new business and output. This is mainly driven by the initial filtering through of recent fine-tuning measures and companies' restocking activities, despite the continuous external weakness," Hongbin Qu, chief economist, China, and co-head of Asian Economic Research at HSBC, said, according to CNBC.
"We expect further filtering-through, which is likely to deliver some upside surprises to China's growth in the coming months," Qu added.
The improvement in HSBC's manufacturing survey, which is weighted toward small and medium-sized companies, comes after an unexpected rebound in the official PMI reading in July, CNBC noted.
The official PMI, which centers on larger and state-owned Chinese factories, rose to 50.3 in July from 50.1 the previous month, surpassing market expectations of 49.9, the news site reported.