A view of a shipbuilding enterprise in Nantong, East China's Jiangsu Province. File photo: IC

China's manufacturing sector has seen mild recovery in July, showing the government's proactive fiscal and monetary policies are kicking in and starting to shore up the growth.

The official manufacturing purchasing managers' index (PMI), a preliminary readout of the country's manufacturing activity, came in at 49.7 for July, 0.3 percentage points higher than the previous month, according to data from the National Bureau of Statistics (NBS) on Wednesday. 

The recovery is deemed anemic, according to market watchers. 

"The latest figure indicates that the slowdown pressure on the manufacturing sector has mildly eased," Liu Xuezhi, a senior economist at Bank of Communications, told the Global Times on Wednesday.

The enhanced tax and fee-reduction policy, worked out since April, has brought about positive influence for manufacturing industries, Liu said.

According to Xinhua News Agency, China's newly-introduced tax cuts and fee reductions have saved businesses around 1.17 trillion yuan (about $170 billion) in the first half of 2019, which greatly helped Chinese businesses. 

Zhao Qinghe, analyst from NBS said in a statement that there have been many positive changes in the manufacturing sector. For example, 12 out of the 21 manufacturing categories are expanding their business, three more than the previous month. And, overall expansion of manufacturing production has accelerated and market demand also improved in July, Zhao said.

However, the slowdown pressure remains as PMI readings are staying in the contraction range, Liu noted, and weakening demand is a major culprit.

A PMI reading above 50 points suggests industrial expansion, while one lower than that suggests contraction.

In specific terms, the PMI for large companies rose to expansion territory at 50.7 percent, up 0.8 percentage points on a monthly basis, while that of middle- and small-size companies remained trapped in the contraction area.

Liu said that middle- and small-size firms take up a large proportion of China's manufacturing sector and therefore bear more pressure now. More tax relief, fee reductions and other measures are needed to alley their pressure.

The non-manufacturing PMI registered 53.7, down 0.5 percentage points from June, but still indicates high-speed expansion, and the composite PMI rose 0.1 percentage point to 53.1, led by a rebounding manufacturing PMI.