“The index has now risen for four months in a row, reflecting that the manufacturing sector continued to recover from the impact of the pandemic, and that the momentum of the recovery remained strong,” Dr. Wang Zhe, senior economist at Caixin Insight Group, said in a commentary accompanying Tuesday's report.

Positive performance of the key sector was driven by expansion of output and new orders, which also saw the most remarkable growth in nearly a decade. The results of the Caixin survey, which is more focused on small- and medium-sized companies, showed that Chinese factories recorded an increase in new export orders for the first time this year as the coronavirus outbreak showed signs of slowdown in some countries outside China.

While employment remains in negative territory for the eighth straight month, in August it edged closer to stabilization, according to the Caixin/Markit data.

The findings of the Caixin survey were slightly more positive than the official manufacturing PMI published by National Bureau of Statistics (NBS) on Monday. According to official data, the manufacturing sector continued to expand last month, by at a slightly slower pace than in July. The official August non-manufacturing PMI showed continued recovery as the service sector expanded at the fastest pace since January 2018.

“Overall, the post-epidemic economic recovery in the manufacturing sector continued. Supply and demand expanded with the pickup in overseas demand. Backlogs of work continued to increase. Both quantity of purchases and stocks of purchased items also grew,” Wang added, commenting on the report.