The Markit/Caixin Manufacturing Purchasing Managers' Index for the month of September stood at 50.1, up from the reading of 50 for the month of August.

Any reading below 50 may point to a possible contraction. This is the third straight month for the index to stay above 50. Before this, the index showed shrinking activity for 16 straight months.

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The Caixin China Manufacturing PMI is based on data compiled from more than 400 manufacturing companies.

The growth can be attributed to the strong domestic and export orders.

Amid this scenario, though, it can be noted that the manufacturing sector showed continuous loss of jobs. The index has oscillated around 50 for the past five years, showing persistently lethargic demand. The survey indicated the expansion in demand during the month, the pace of expansion was the slowest in three months.

The rate of job decline in the month of September was also the slowest in the past nine months. The rate of job loss still remains a cause of worry.  The survey showed that eight percent of the companies reported lower number of workers, the main cause of which is the cost cutting measures undertaken by the firms.

On the brighter side, the firms were able to pass on their higher input costs by raising the prices. The rate of increase in prices was sharper in the month of September. The government spending on infrastructure also provided a fillip to the industry. Housing sector is also booming in the country, prompting rumors of a bubble.

Despite this, the People's Bank of China is not likely to take any drastic steps.

Tagschina, The Markit/Caixin manufacturing Purchasing Managers' Index, People's Bank of China (PBOC), China Caixin Manufacturing