The purchasing managers' index (PMI) for China's manufacturing sector grew to 49.7 in July, up from 49.4 in June, the National Bureau of Statistics (NBS) said Wednesday.
A reading above 50 indicates expansion, while a reading below reflects contraction.
That was the first month-on-month PMI growth in four months, said NBS senior statistician Zhao Qinghe.
The sub-index for production gained 0.8 points to 52.1 in July, signaling faster expansion, while that for new orders rebounded by 0.2 points to 49.8.
Among the 21 industries surveyed, 12 were in the expansion zone, up from 9 in June, Zhao said when elaborating on the economic indicator.
Market sentiment warmed up as the sub-reading for business expectation rose to 53.6 in July, he said.
The policies of cutting taxes and fees and targeted reserve requirement ratio reduction have further eased the burden on enterprises and stabilized their confidence, Zhao said.
The PMI of large enterprises was higher than those of small and medium ones, which saw up to 0.4 points of month-on-month drop.
A meeting held Tuesday by the Political Bureau of the Communist Party of China Central Committee decided the cuts would be further implemented amid holistic efforts to maintain stable growth.
The financial supply-side structural reform will be advanced and financial institutions should be encouraged to increase medium- and long-term financing to the manufacturing industry and private companies.
Targeted measures will be taken to support the development of private enterprises, according to a statement released after the meeting.
Wednesday's data also showed China's composite PMI went up 0.1 points to 53.1, which pointed to steady business expansion.