China official PMI edges up to 50.3 in July

Sub-index on new orders rises to 50.6 in July indicating stronger demand for Chinese goods

Growth in China's manufacturing sector picked up slightly in July, with the official purchasing managers' index (PMI) rising to 50.3 from June's 50.1, data showed on Thursday.

A reading above 50 indicates expanding activity while a figure below that level points to a contraction.

The PMI figure, published by the National Bureau of Statistics, was stronger than market expectations in a Reuters poll of 49.9.

A sub-index measuring new orders edged up to 50.6 in July from 50.4 in June, indicating stronger demand for Chinese goods.

A PMI survey sponsored by HSBC, which focuses more on small-and medium-sized firms in the private sector as compared with the official one, is scheduled to be published on 0145 GMT.

Its preliminary July reading, published on July 24, slowed to an 11-month low of 47.7 as new orders shrunk and the job market darkened.

The government has unveiled a series of small, targeted steps in recent weeks, including more spending on social housing and railways and tax cuts for small businesses, to bolster the economy, which has slowed in nine out of the past 10 quarters.

It is trying to tackle overcapacity in industries such as steel, cement and shipbuilding, and is betting on a developing services industry to absorb surplus workers.

But the economy also faces stiff global headwinds, and a recent interbank cash crunch has underscored Beijing's resolve to defuse possible systemic financial risks.