The Caixin/S&P Global manufacturing purchasing managers' index (PMI) rose to 50.9 in May from 49.5 in April, above the 50-point index mark that separates growth from contraction.
The reading surpassed expectations of 49.5 in a Reuters poll, a stark contrast to a deeper contraction activity seen in the official PMI released on Wednesday.
The manufacturing subindexes showed factory output rose at the fastest clip in 11 months while new orders including new exports expanded in May.
However, business confidence for the coming 12 months fell to a seven-month low amid concerns over global economic prospects.
"Current economic growth lacks internal drive and market entities lack sufficient confidence, highlighting the importance of expanding and restoring demand, " said Wang Zhe, Senior Economist at Caixin Insight Group.
Persons:
Zhou Hao, Hang, Wang Zhe, 25bps, Liangping Gao, Joe Cash, Ryan Woo, Sam Holmes, Simon Cameron, Moore
Organizations:
P Global, PMI, Guotai, CSI, Caixin Insight, ANZ, Thomson
Locations:
BEIJING, China