Chinese manufacturing improved last month, two surveys showed, in the latest sign that a painful and prolonged slowdown in the world's second biggest economy may be stabilising.
The private HSBC purchasing managers' index showed a slight expansion in August after three months of contraction.
An official survey released yesterday showed that output jumped to the highest level in two years.
HSBC's PMI rose to 50.1 in August, after falling to an 11-month low in July, as output and new orders edged up slightly and order backlogs rose at the fastest pace in two years.
Meanwhile, an official survey by the China Federation of Logistics and Purchasing showed manufacturing expanded for the second month in a row.
The group's manufacturing index rose to 51 from July's 50.3, which was the highest level and biggest increase this year.
Both indexes use a 100-point scale on which numbers below 50 indicate contraction. Domestic demand looks to be driving the improvement in manufacturing.
HSBC's survey, which is tilted to small and medium-sized private enterprises, found new export orders continued to decline because of sluggish demand in the US and Europe. The federation's survey, meanwhile, gives an outsize representation to China's big state-owned enterprises, which hardly compete in export markets.
The signs of improvement in China's massive manufacturing industry will offer encouragement to China's leaders, who are trying to reverse a slowdown that has pulled economic growth to a two-decade low of 7.5% in the latest quarter.
China's leaders say they are comfortable with slower growth as they try to steer the economy away from an export-driven model to one based on domestic consumption. They have opted for measures to bolster individual areas of the economy such as railways and small businesses rather than an across-the-board stimulus.
Analysts said the upbeat manufacturing reports ease pressure on policymakers to unleash more stimulus. HSBC's survey, based on responses from 420 companies, confirms a preliminary version released last month.
Other recent signs of possible improvement in China's economy include a 10.9% surge in July imports that beat expectations, while exports grew 5.1%.
