China factory activity returns to growth in September

China’s factory activity returned to growth in September, official data showed Wednesday, after two months of contraction in the world’s second-largest economy.

The National Bureau of Statistics said the manufacturing purchasing managers’ index was 50.1, just above the 50 mark that separates expansion from contraction. The reading improved from 49.8 in July and 49.2 in August and was in line with a Bloomberg survey of economists.

NBS statistician Huo Lihui said the figures showed a recovery in economic conditions. He said equipment manufacturing, high-tech manufacturing and consumer goods industries showed rapid expansion.

The non-manufacturing PMI, covering areas including services and construction, rose to 50.2 from 49.0 a month earlier. That was above a Bloomberg forecast of 49.2.

The data followed Beijing’s announcement of measures aimed at supporting the economy, stabilising the property market and promoting employment and income growth. The People’s Bank of China also announced steps to reduce credit costs in sectors including infrastructure and technology and to offer more subsidies to home buyers.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the stimulus policies were “another step in the right direction” but might not be enough on their own to stabilise the economy.