HSBC: China manufacturing picks up in March

Signs of growth are returning to China's vast manufacturing sector, according to a preliminary survey by HSBC.

The HSBC Purchasing Managers' Index rebounded to 51.7 in March, slightly higher than 50.4 in February, but well below a two-year high of 52.3 reached at the beginning of the year. A sub-index measuring factory output rose in March to 52.8, recovering from 50.8 in February.

But subindexs measuring both input and output prices fell, indicating overcapacity upstream and sluggish demand. HSBC's chief economist says the latest data suggests the Chinese economy is on track for a gradual recovery.