The purchasing managers' index (PMI) for China's manufacturing sector rose to 51.1 in July from 50.9 in June, the National Bureau of Statistics (NBS) said Friday.
It is the fifth month in a row that the figure remained in the expansion territory. A reading above 50 indicates expansion, while a reading below reflects contraction.
Commenting on the sustained expansion, NBS senior statistician Zhao Qinghe said: "Policies of balancing epidemic control and economic development further yield tangible fruit, as economic vitality continues recovering and enterprises keep registering better operational outcomes."
Zhao cited sub-indices of the manufacturing PMI as evidence of economic recovery across the board.
The sub-index for production edged up 0.1 points to 54 in July. New orders picked up 0.3 points to 51.7, rising for three consecutive months. While the sub-index measuring new export orders gained 5.8 points to 48.4.
"Enterprises stay optimistic about recovery in their industries," Zhao said.
The better-than-expected PMI figure comes as the epidemic situation in China has become stable and the economy has basically recovered.
NBS data released Friday also showed an extensive rebound in non-manufacturing sectors as their PMI came in at 54.2 in July and service suppliers, including those hit especially hard by the epidemic, showed stronger business vitality.
Sectors including railway and aviation transport, postal and express delivery and accommodation all logged busier business activities, with their sub-indexes all standing above 60.
These PMI readings point to steady recovery momentum in July despite the floods along the Yangtze River and scattered local COVID-19 cases, according to an emailed research note authored by analysts with the financial services firm Nomura.
"We expect China's official manufacturing PMI to remain at around 51.0 in the coming months," the note said, citing growth headwinds including worsening COVID-19 situations in many parts of the world as cause for caution.
Many problems China faces are long- and medium-term, and resolving such problems is like fighting a protracted war, according to a Thursday meeting of the Political Bureau of the Communist Party of China Central Committee.
Noting that the "protracted-war" assessment has strong implications for policies, Nomura expects the country to make a shift from a "wartime mode" for fighting the COVID-19 outbreak toward meeting structural issues and long-term challenges.
The country wrapped up the first half with GDP growth of 3.2 percent in Q2, after a virus-caused 6.8-percent contraction in the first quarter. A slew of other mid-year economic indicators including consumption, jobs and foreign trade also painted the picture of an economy disentangling from COVID-19 disruptions.
Citing a survey of 67 economists, Bloomberg News said in a recent report that China's growth in the current quarter will be 5.2 percent year on year, faster than the 3.2-percent expansion in the three months to June.
