The Caixin/Markit survey, which focuses on smaller private firms, followed strong readings of official PMIs, which cover large State-owned companies. The official manufacturing PMI rose to 50.5 in March, while non-manufacturing PMI rose to 54.8. Together, they offer a positive picture of China's massive manufacturing and services sectors. Photo: VCG

China's manufacturing activity rebounded in August to the expansion range, with the index posting the highest level since April, according to a survey by Caixin magazine released on Monday.

The Caixin/Markit factory Purchasing Managers' Index (PMI) was 50.4 in August, up 0.5 point from July and rebounding to the expansion range above a reading of 50. PMI readings below 50 signal contraction.

The rise mainly reflected improved production activity. The subindex for manufacturing output entered the expansion range in August, the highest level in five months, sending signs of demand turning up as reflected by manufacturers, according to the survey.

"The index sends positive signals amid the Chinese economy's downward pressure," Tian Yun, a vice director of the Beijing Economic Operation Association, told the Global Times on Monday.

"Compared with the output index, new orders are more important as they are the foundation of sustainable manufacturing," said Tian.

The subindex for new orders stayed in expansionary territory in August, but inched down from July, while the decline of subindex for new export orders surpassed that of new orders, showing the cushion from domestic orders against sliding export orders.

The gauge for new export orders remained in contraction territory and fell to the lowest level this year in August, said the survey.

"Domestic consumption needs further boost, especially the auto sector, to drive the economy's improvement," said Tian.

On August 27, China announced measures to prop up consumption in a wide range of areas from retail to vehicles to energy.

Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin, said the data reflected declining foreign demand amid an intensifying trade tensions between China and the US.

Despite some warming signs for the Chinese economy, it still faces downward pressure in the long term, especially amid the escalation of the trade war, Zhong said in a press release.

The Caixin PMI index is different from the official PMI index, which was released by the National Bureau of Statistics on Saturday. That index showed a further contraction of the manufacturing sector to 49.5 points from 49.7 in July. The Caixin manufacturing PMI focuses on light industry.