A flash estimate of China's Purchasing Managers' Index, which shows expansion with numbers above 50, measured 51.7 in March after coming in at 50.4 in February.
China's production index for manufacturing rose to 52.8 from 50.8. Both indexes are at two-month highs, Markit said.
"The March flash manufacturing PMI rebounded to 51.7 on the back of stronger new orders and production growth," said Hongbin Qu, chief economist, China, and co-head of Asian Economic Research at HSBC.
"Inflation remains well behaved, leaving room for Beijing to keep policy relatively accommodative in a bid to sustain growth recovery," the economist said.
The monthly survey showed employment, new orders, factory output and backlogs of work all on the rise. Output and input prices decreased in the month. Inventories expanded after contracting in February, the report said.
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