The China Daily reported Saturday the Purchasing Managers Index rose from 51.7 in August to 53.8 in September. Numbers above 50 indicate growth in the manufacturing sector.
In the manufacturing report, the new orders index jumped in September from 53.1 to 56.3. The export-order index rose slightly from 52.2 to 52.8.
The upturn came as the government has made efforts to slow down quickly escalating property prices and trim energy use.
Efforts to tighten restrictions on home loans and a suspension on loans for a third home have had little carryover effect into manufacturing, the newspaper said.
Economist Liu Ligang at Australia & New Zealand Banking Group Ltd., based in Hong Kong, said the report showed a balance between domestic and foreign demand for Chinese goods. "Today's better-than expected PMI suggests that China's economy has regained strength on a strong pick up in domestic orders and a steady increase in external demand."