The manufacturing sector has been a key driver of China’s economic growth.
China’s manufacturing activity grew at its fastest pace for six months in June, suggesting that recent stimulus moves have started to have an impact.
The official purchasing managers’ index (PMI) rose to 51, from 50.8 in May.
The PMI is a key indicator of the sector’s health and a reading above 50 shows expansion.
China, the world’s second-largest economy, has taken various steps in recent months – including cutting taxes for small firms – to help boost growth.
Last month, China’s central bank said it will cut the reserve requirement ratio (RRR) – the amount of cash banks needs to keep in reserve – for banks engaged in lending to agriculture-related businesses and small companies.
China’s central bank, the People’s Bank of China, said it would also encourage banks to lend more to exporters to boost shipments.
In April, the government said it will cut taxes on small firms and speed up the construction of railway lines across the country.
The government has also announced plans to build railways, roads and airports along the Yangtze River – which connects China’s less developed inland provinces to Shanghai.
China’s economy expanded at an annual rate of 7.4% in the January to March period, from a year ago, down from 7.7% growth in the final quarter of last year.
Source : BBC News | July 1, 2014