China manufacturing activity strengthens in August

High-tech manufacturing remains a bright spot in China's economy, according to NBS analyst Zhao Qinghe

China's factory activity ticked marginally upward in August, official data showed Friday, beating forecasts as analysts expected the trade war with the US to weigh more heavily on manufacturing.

The Purchasing Managers' Index (PMI), a key gauge of factory conditions, came in at 51.3 for the month, up from 51.2 in July, the National Bureau of Statistics (NBS) said.

The number beat the 51.0 reading tipped in a Bloomberg News survey of economists, and indicates a strengthening of activity.

It held comfortably above the 50-point mark that separates expansion from contraction.

"Production continued to expand, and market demand was stable overall," said NBS analyst Zhao Qinghe in a statement, noting that high-tech manufacturing remains a bright spot, significantly outpacing the overall environment.

"Due to factors such as heating up international trade frictions and an uncertainty external environment, the import and export boom has tapered off," Zhao said.

The data should calm some nerves around China's economic woes, said Stephen Innes, head of Asia-Pacific trading at OANDA.

"With that said, I don't feel any more positive about China than I did this morning," said Innes, adding he would be looking at other economic indicators to be released in coming weeks.

Facing a deteriorating trade relationship with the US and flagging economic momentum, Beijing last month signalled it would shift to a looser fiscal policy by unveiling a series of support measures and stepped up issuance of local government special bonds to push infrastructure spending.

But policymakers have been adamant they will not resort to a full scale stimulus to combat flagging growth.