The HSBC Flash China Manufacturing PMI reading rebounded to a year to date high of 50.8 in June.
The HSBC Flash China Manufacturing PMI is published on a monthly basis ahead of final PMI data, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China.
"The improvement was broad-based with both domestic orders and external demand sub-indices in expansionary territory," says Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC.
Qu added that inventory reduction quickened, and the employment sub-index also showed signs of stabilization.
Qu also noted that this month's improvement is consistent with data suggesting that the authorities' mini-stimulus are filtering through to the real economy.
HSBC expects that over the next few months, infrastructure investments and related sectors will continue to support the recovery.
"We expect policy makers to continue their current path of accommodative policy stance until the recovery is sustained," says Qu.