China's manufacturing activity improved slightly in September, underscoring sustained output growth in the month, according to a flash reading of the HSBC survey released on Tuesday.

The HSBC flash manufacturing purchasing managers' index (PMI) in September stood at 50.5, rising from 50.2 in August.

The flash PMI reading was better than the market expectation of 50. A reading under 50 indicates contraction, while one over 50 signals expansion.

"The picture is mixed, with new orders and new export orders registering some improvement. Meanwhile, the employment index declined further and deflationary pressure intensified," said Qu Hongbin, chief economist for HSBC China.

The new orders index rebounded by 1 point, and the new export orders index rose by 1.9, indicating that exports will remain the most important economic growth driver.

Qu said economic activity in the manufacturing sector showed signs of stabilization in September, but the property downturn remains the biggest downside risk to growth.