China's factory activity expanded at a slower-than-expected pace in September, a private survey showed on Monday, calling into question the strength of the recovery in the world's second largest economy.
The HSBC Purchasing Managers' Index (PMI) came in at 50.2 – significantly below the flash estimate of 51.2, but a touch higher than 50.1 in August. A reading above 50 indicates expanding activity and one below signals contraction.
"There are still a lot of structural headwinds ahead. This is as good as it gets for the time being. It reflects the stimulus over the summer but don't expect too sharp an acceleration from here," said Frederic Neumann, MD and co-head of Asian economics research at HSBC.
While new domestic orders remained flat from the previous month, external demand was a bright spot. New business from overseas clients increased for the first time in six months, with managers seeing stronger demand from Europe and the United States.