China August PMI index rebounds

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China's official purchasing managers' index rebounded a touch in August from a seventeen month low in July. This came after the government was steady on policy and refrained from furthering tightening, allowing economy to firm up.

The figures released by the China Federation of Logistics and Purchasing saw the index in August rise to 51.7 from 51.2 in July. It was the 18th straight month that the official PMI has stood above the threshold of 50, signaling that businesses are still expanding.

A rebound in the PMI would help instill confidence that the Chinese economy remains robust despite the months-long campaign to crack down on property speculation and slow the pace of bank lending.

However, the new orders subindex, an important leading indicator, is being closely watched. It has slumped for three straight months and was close to falling into contractionary territory in July. But for August, it improved marginally.