An initial survey by HSBC has shown that China's manufacturing activity has picked up speed in September, hinting to a recovering economy of the country.
HSBC's Purchasing Managers' Index (PMI), a gauge of the sector's health, rose to 51.2 from 50.1 in August, and a reading above 50 shows expansion.
China has taken various steps to boost its economy after the recent slowdown in its growth rate, including suspending value-added tax for small businesses in order to try and boost domestic consumption, the BBC reports.
According to the report, China has relied heavily on its manufacturing and export sectors to drive its economic growth in the past decades, but a slowdown in demand from the US and European key markets in recent times have hurt those sectors and its overall growth.
Chief China economist at HSBC, Hongbin Qu said that a more sustained recovery is expected as the further filtering-through of fine-tuning measures will lift domestic demand.
HSBC's survey data showed that factory output, exports, retail sales and fixed asset investment all rose in August.
Qu said that the latest data, which showed the initial HSBC PMI reading hitting a six-month high, was likely to see China introduce further steps to help boost domestic consumption, the report added.