Activity in China's manufacturing sector expanded in August due to a recovery in market demand and a rebound in production, official data showed Thursday.

    The purchasing managers' index (PMI) came in at 50.4 in August, rising from 49.9 in July and beating the market expectation of 49.8, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing. A reading above 50 indicates expansion, while a reading below 50 reflects contraction, state news agency (Xinhua) reported. 

    NBS statistician Zhao Qinghe said both production and demand picked up in August. The sub-index measuring production stood at 52.6, up 0.5% points from July and also the highest level since the start of the year.  The sub-index for new orders settled at 51.3, 0.9 percentage points higher than the previous month. 

    Company confidence generally improved in August, especially in high-tech manufacturing and consumer goods. Business expectation indices for the two sectors both rose to over 60 percent, showing optimism on future growth. The Caixin General China Manufacturing Purchasing Managers' Index, an indicator of manufacturing activity based on a private survey, dropped to 50 in August from 50.6 in July. 

    NBS data released Thursday showed that activity in the non-manufacturing industry continued to expand in August, but at a slightly slower pace than in the previous month. The official non-manufacturing Purchasing Managers' Index stood at 53.5 in August, down from 53.9 in July but above the 50-point mark that separates growth from contraction. 

    China's GDP expanded 6.7 percent in the second quarter, the lowest growth rate since the global financial crisis in early 2009 but still within the government's target range of 6.5-7 percent for 2016.