China's factory activity expanded at its fastest pace in 18 months in July as new orders surged, a preliminary HSBC survey showed on Thursday, the latest indication that the economy is picking up as government stimulus measures kick in.
The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose to 52 in July from June's final reading of 50.7, beating a forecast of 51 in a Reuters poll.
It was the highest reading since January 2013, and above the 50-point level that separates growth in activity from contraction for the second consecutive month.
Mainland China stocks jumped after the PMI report while shares in the rest of Asia edged higher. The Australian dollar hit a three-week high on prospects of stronger exports to China.
Still, some analysts say the recovery appears patchy, and more stimulus may be needed to offset the downdraft from the cooling property market on the broader economy and increasing risks in the financial system, such as deteriorating credit quality.
