Manufacturing activity in China rose to a two-year high in January, according to figures released today (24 January) by banking giant HSBC.

The purchasing managers' index (PMI), which is compiled by information services provider Markit and released by HSBC, rose to 51.9 for the month, up from 51.5 in December.

"At 51.9, January's HSBC China manufacturing PMI rose for the fifth consecutive month to the highest level in two-years, heralding a good start to the New Year," noted Hongbin Qu, head of Asian economic research at HSBC.

"Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases.

"Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months."

HSBC's index is based on responses from purchasing executives at 420 manufacturers across a range of industries.