An independent survey has shown that manufacturing in China hit a five-month high in September as production and new orders rose.
The HSBC China Manufacturing PMI, or purchasing managers' index, rose to 52.9 up from 51.9 last month. Any figure above 50 means the sector is expanding, while below 50 indicates a decline.
'A pick-up in new orders means that domestic demand is still strong,' said Qu Hongbin, chief economist at HSBC in Hong Kong.
China's economy grew at an annual rate of 10.3% in the second quarter of 2010 compared with a blistering 11.9% in the first three months as government efforts to rein in soaring property prices started to bite.
'Despite uncertainties on growth in global demand, we expect China to rely on continued investment in ongoing infrastructure projects and resilient consumption to grow by around 9% in the rest of the year and 2011,' Qu said.
Analysts warned that the manufacturing sector would face weaker demand in major export markets in the second half as the United States struggles to recover from the global recession and Europe deals with its debt crisis.
