China's manufacturing activity hits 3-month high

China's manufacturing activity grew to a three-month high in October, preliminary results of a business survey by Markit Economics and British bank HSBC Ltd. showed Thursday.
The HSBC Flash China Manufacturing Purchasing Managers Index (PMI), a gauge of nationwide manufacturing activity of the Chinese economy, rose to 50.4 percent, up from September's final reading of 50.2 percent on a 100-point scale. The October index was the highest since July, and stayed above the key 50 percent line for the fifth straight month.
A PMI reading above 50 percent indicates growth from the previous month, while a reading below 50 represents contraction in China's manufacturing sector.
The index is a closely watched barometer of the health of the world's second-biggest economy.
"While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand," HSBC economist Qu Hongbin said in a statement accompanying the data.
"This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead," said Qu. China's economic growth slowed to a five-year low of 7.3 percent in the third quarter, official data showed.