China's Factory Activity Expands for First Time in Three Months

China's factory activity expanded in September, marking the first positive sign in three months as the government works to stimulate economic growth. The official manufacturing purchasing managers' index (PMI) increased to 50.1 from 49.8 in August, according to data released by China's National Bureau of Statistics on Wednesday. This reading, based on a monthly survey of companies, met economists' expectations.

A PMI reading above 50 indicates expansion. Several subindexes within the report showed continued growth, with the production subindex rising to 51.7 from 50.4 in the previous month. The new orders subindex saw a slight decrease to 50.5 from 50.6, while new export orders also eased to 50.0 from 50.1.

A separate private survey, the RatingDog PMI, corroborated these findings, showing an advance to 52.1 in September from 51.5 in August.

These reports come ahead of China's weeklong October national holiday, a period where domestic consumption and spending are closely monitored by policymakers. The data also follows recent economic support measures announced by China, including new subsidies for mortgage interest payments for homebuyers.

China's economy has faced mounting pressure from a slowdown, with domestic demand and investment remaining sluggish. Weaknesses in the property sector have contributed to these challenges, although exports of high-tech goods have seen a boost from the global artificial intelligence boom.

"Manufacturing has been a relative strength this year, though it has mostly been driven by external demand as domestic consumption and investment lag," wrote Lynn Song, chief economist for Greater China at ING Bank, in a commentary. Some economists anticipate China may surpass last year's record $1.2 trillion trade surplus, potentially aided by recent improvements in U.S.-China relations, including a two-month extension of a trade truce until January.