Activity in China's vast factory sector increased to a five-month high in May on rising new orders, official data showed on Sunday, reinforcing views that the world's second-largest economy is regaining momentum in the second quarter following Beijing's targeted measures to bolster growth.
The official Purchasing Managers' Index rose to 50.8 in May from April's 50.4, the National Bureau of Statistics said on Sunday, beating market expectations of 50.6.
"The PMI reading continued to improve in May, indicating that a trend of economic stabilization is becoming more evident," Zhang Liqun, a researcher at the Development Research Centre said in the statement accompanying the data.
A sub-index for new orders, a measure of foreign and domestic demand edged up to 52.3 in May from 51.2 in April.
The PMI survey also showed export orders inched higher to 49.3 in May from 49.1 in April, though the indicator remained below the 50-level threshold that separates growth from contraction.
As one of the first leading indicators gauging economic momentum, the improved reading could bode well for other May data, reinforcing expectations that the economy is starting to regain strength in the second quarter after dipping to a 18-month low in the first three months.