The purchasing managers' index (PMI) for China's manufacturing sector came in at 50.1 in September, up from 49.4 in August, data from the National Bureau of Statistics showed Friday.

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

"As policies and measures to stabilize the economy continue to take effect this month, and the negative effects of heatwaves wane, the manufacturing PMI has bounced back to expansion territory," the bureau's senior statistician Zhao Qinghe said.

Business activities of manufacturing companies have picked up pace as the manufacturing sector enters peak season, Zhao said.

The sub-index for production reached 51.5 in September, up 1.7 points from the previous month. Specifically, the PMI of industries such as food and beverages, medicine, and equipment manufacturing rose to above 54, indicating expanded production.

Demand continued to improve, as the sub-index for new orders rose 0.6 points from August to 49.8.

Although the sub-index of new orders remained below the boom-bust line, the country's demand contraction has narrowed as supporting policies were implemented to push up domestic demand, said Zheng Houcheng, director of Yingda Securities Research Institute.

In September, the PMI for large enterprises edged up 0.6 points to reach 51.1, remaining in the expansion area for two consecutive months.

The business environment of large enterprises has secured its position above the boom-bust line, thanks to a flurry of successive policies from the government to stabilize the economy since late August, said Wen Bin, chief analyst at China Minsheng Bank.

Positive effects of the policies are also rippling through medium and small enterprises, as the PMI of medium and small enterprises rose 0.8 points and 0.7 points, respectively, compared with that in August.

The confidence of manufacturing companies has strengthened in September, with the sub-index for production and operation activity expectation standing at 53.4, up 1.1 points from the previous month.

Enterprises in industries including agricultural and sideline food processing, automobile, and railway were especially upbeat about the market prospects, as their index for production and operation activity expectation stayed above 58 in September.

Friday's data also showed that the PMI for China's non-manufacturing sector came in at 50.6 in September, down from 52.6 in August.

"The foundations of economic recovery will be further consolidated, as supporting policies continue to take effect," said Fu Linghui, an official with the National Bureau of Statistics.