Production activity in China grew unexpectedly in March at its fastest pace for eight months, showed a private survey on Monday.
Markit and Caixin said in a joint press release that factory staffing levels rose in March to mark its first expansion since October 201
" In general, with a more relaxed funding environment, the government's efforts to sponsor the private sector and positive advances in trade between Chinese and US trade, the situation in the industry recovered in March, Zhong said.
The results of the private survey came after the data in Sunday showed that the official purchasing manager's index rose to 50.5 in March from February three-year low of 49.2. It marked the first four-month expansion, according to data released by China's National Bureau of Statistics.
Production numbers come through ongoing tariff negotiations between the United States and China to resolve their trade differences. High-trade negotiations between the two economic powerhouses are set to resume in Washington this week after last week's talks in Beijing.
Caixin PMI is a private survey focused on smaller businesses and provides an initial insight into the operating environment. It is carefully monitored as an alternative to the official PMI.
Despite the strength of China's production data in March, there are still reasons to be cautious about the country's near-term outlook, says Julian Evans-Pritchard, senior Chinese economist at Capital Economy.
The distribution of both the official and private PMI indices indicates a slight recovery in external demand, with most of the improvement coming from a domestic demand pickup, Evans-Pritchard wrote in a note on Monday.  "We suspect this was driven by stronger fiscal support since local governments have intensified bond issuance recently," he added. "That way, the official PMI for the construction industry rose last month, in line with an acceleration in infrastructure spending."
China's growth may continue to weaken in the short term as indicated by recent credit growth data and a sharp decline in
Results of the Caixin PMI service survey will be released on Wednesday.
– Reuters contributed to this report.