China June manufacturing sector PMI defies forecasts for dip

The results of a Chinese government survey pointed to a sharp pick-up in manufacturing sector activity and robust economic growth in June, but some economists were sceptical.

China's official manufacturing sector purchasing managers' index rose from a reading of 51.2 for May to 51.7 in June.

Economists on the other hand had been expecting a dip to 51.0.

Stronger foreign demand appeared to be the key driver behind the improvement in the data but there were also hints in the report that the domestic economy was improving, said Julian Evans Pritchard at Capital Economics.

However, Evans-Pritchard recommended clients take the figures with a pinch of salt given the recent divergence between the official survey and other more reliable indicators which had pointed to less economic momentum.

In fact, even if Friday's readings were confirmed by other data any improvement in China's growth was likely to prove temporary, he said.

The results of the official services sector PMI, which were also released on Friday, also improved, printing at 54.9 versus 54.5 in the month before.

"With tight monetary conditions weighing on credit growth, it will be difficult to avoid a renewed slowdown in growth later this year."