'More growth' for China factories

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China's manufacturing sector continued to recover in August, two separate monthly surveys have indicated.

The China Federation of Logistics and Purchasing's purchasing managers' index rose to a 16-month high of 54 points in August, up from 53.3 in July.

With any figure above 50 indicating growth, this was the sixth month of expansion. A separate manufacturing index compiled by HSBC also rose.

The government's stimulus spending is continuing to lift factory output.

First launched in November of last year, Beijing is spending $586bn (£370bn) between now and the end of 2010 on housing and infrastructure projects across the nation, and post-earthquake reconstruction in the south west of the country.

China's factories are also continuing to benefit from an upturn in export orders as the global economy continues to recover.

Recovery 'on track'

HSBC's index of manufacturing output rose to 55.1 in August from 52.8 in July, its fifth month of growth.

The latest signs that China's vast manufacturing sector is continuing to recover comes despite some sharp declines in Chinese shares in recent weeks, due to fears that stocks are overvalued.

"China's equity market has taken a battering in the last few weeks, but the economic data suggests that the recovery remains on track," said Brian Jackson, a strategist with Royal Bank of Canada in Hong Kong.

The most recent official figures showed that the Chinese economy grew at an annual rate of 7.9% between April and June, up from 6.1% in the first quarter, but less than the double-digit growth seen between 2003 and 2007.