According to an HSBC survey, China’s Purchasing Manager’s Index (PMI) rose to 49.5 in July, a five-month high and up from 48.2 in June.
PMI is an indicator of growth in the manufacturing sector of an economy. A reading above 50 shows expansion, while one below that indicates contraction.
China’s PMI reading has remained below the threshold 50 mark for the past nine months.
Its manufacturing sector has been hit severely by the deteriorating situation in of its biggest markets, the Eurozone, due to falling demand.
The sector’s contraction pace has slowed in July mainly due to the easing policies from the government.
Recent measures implemented by the government to boost growth included lowering interest rates and requiring the banks to lower the amount of cash held in reserves in order to boost lending in the country.
Analysts, however, said that Beijing needed to introduce fresh measures “to support growth and jobs.”
The world’s second largest economy is currently facing its slowest economic growth pace, at an annual rate of 7.6%, in three years.
