China July HSBC flash PMI rises to 18-month high of 52.0

BEIJING (Reuters) - Activity in China's factory sector expanded at its fastest pace in 18 months in July, a preliminary HSBC survey showed on Thursday, as a raft of government stimulus measures kicked in.

The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose to 52.0 in July from June's final reading of 50.7, beating a forecast of 51.0 in a Reuters poll.

It was the highest reading since January 2013, and above the 50-point level that separates growth in activity from contraction for the second consecutive month.

A sub-index measuring new orders, a gauge of demand at home and abroad, hit a 18-month high of 53.7, while the sub-index for output also rose to a 16-month high in June.

The final Markit/HSBC manufacturing PMI for July is due on Aug. 1.

China's economy grew slightly faster than expected in the second quarter as a burst of government stimulus paid dividends, but analysts said Beijing will likely need to offer further support to meet its growth target of around 7.5 percent for 2014.