China's manufacturing growth picked up in August, expanding at its fastest rate this year amid massive stimulus spending, according to the state-sanctioned China Federation of Logistics and Purchasing. The federation said its purchasing managers index rose to 54 from July's 53.3 on a 100-point scale where numbers above 50 show activity expanding. It marked the sixth month of expansion.

Economists see the PMI as a better measure of China's economic outlook than data such as gross domestic product because it includes forward-looking elements such as new and export orders. The survey is based on responses from managers who oversee purchasing for some 700 Chinese companies.

The report adds to signs that Beijing's massive stimulus is helping to revive economic growth, though private sector activity has lagged state enterprises that are the main target of government spending.

"The August PMI is continuing to rise at a rate slightly above 50. This shows the Chinese economy is maintaining its recovery trend," a Cabinet economist, Zhang Liqun, said in a statement released by the federation.

The federation's index of new orders, an indicator of future activity, was flat from July's level but still showed an expansion at 55. 

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