China factory activity seen rebounding in September as Beijing pledges more support

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China's official manufacturing purchasing managers' index is expected to rise to 50.1 in September from 49.8 in August, ending two straight months of contraction, according to a Reuters poll of 29 economists published Sept. 29. The 50-point mark separates expansion from contraction. The reading, based on company surveys, will be released by the National Bureau of Statistics on Wednesday.

The private RatingDog manufacturing PMI, compiled by S&P Global and also due Wednesday, is likely to edge up to 51.6 from 51.5 in August, the poll showed. The improvement reflects expectations that the vast manufacturing sector recovered after heavy rain and typhoons disrupted factory operations in some regions in August.

A State Council meeting chaired by Premier Li Qiang on Monday said the government will "launch a package of pragmatic and effective incremental policy measures" to address rising economic strains, signalling greater urgency to shore up growth.

The pledge lifted Tuesday's trading: the blue-chip CSI300 was roughly flat by the lunch break while the Shanghai Composite gained 0.1%; real estate developers led gains onshore, with Vanke shares up nearly 8%; the 5G Communication Index rose 0.8% and the tech-focused STAR50 climbed 0.6%. Hong Kong's Hang Seng fell 0.6%, with tech majors listed there down 1.4%. Goldman Sachs expects policymakers to further broaden the use of housing provident funds to reduce mortgage rates, with more large cities introducing local housing easing measures.

Trading stayed thin ahead of the week-long National Day holiday, which starts Thursday; onshore trading resumes Oct. 8. China is due to release third-quarter GDP data and September activity indicators later this month, with officials saying the economy remains on track to meet its 4.5%-to-5% annual growth target.