China's economy signalled strength in September as an flash index of manufacturing activity rose to a-six month high. The preliminary HSBC China Manufacturing Purchasing Managers Index rose to 51.2 in September compared with a final reading of 50.1 in August, HSBC Holdings PLC said on Monday. A reading above 50 indicates expansion and one below 50 indicates contraction.

The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data

Hongbin Qu, chief economist, China & Co-head of Asian Economic Research at HSBC said: “The HSBC Flash China Manufacturing PMI rose to a six-month high in September, adding further evidence to China’s ongoing growth rebound. The firmer footing was supported by simultaneous improvements of external and domestic demand conditions.

We expect a more sustained recovery as the further filtering-through of fine-tuning measures should lift domestic demand. This will create more favourable conditions to push forward reforms, which should in turn boost mid- and long-term growth outlooks.”

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