An uptick in Chinese manufacturing activity in August has eased slowdown fears, but analysts have flagged concerns about the quality of growth and say growth momentum could slow in the fourth quarter.
Data on Monday showed China's final HSBC purchasing managers' index (PMI) for August was unchanged from the flash figure of 50.1 and up from an eleven-month low of 47.7 in July, continuing the positive tone set by China's official PMI figure out over the weekend, which showed factory activity expanding to a 16-month high of 51 in August up from 50.3 in July.
Despite the strong improvement in both indices, analysts told CNBC the positive momentum might not last for long.
"Despite the official PMI being at a 16-month high, it is still only merely 51. We do not expect a sustained period of recovery or acceleration in growth in the coming quarters," said Jian Chang, chief China economist at Barclays on CNBC's "The Call" on Monday.
"One thing to keep in mind in the medium term is that the fundamental challenges facing the Chinese economy have not changed," she said, referring to a plethora of headwinds faced by China's industry including overcapacity, rising labor costs, and the risks from a frothy property sector and concerns over the state of the banking sector.
"We do expect the year on year growth may slow down in the fourth quarter," added Chang.