BEIJING--The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose to an 18-month high of 52.0 in July, compared with a final reading of 50.7 in June, HSBC Holdings PLC said Thursday.

A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction.

"Economic activity continues to improve in July, suggesting that the cumulative impact of mini-stimulus measures introduced earlier is still filtering through," HSBC economist Qu Hongbin said in a statement.

New export orders expanded at a faster pace in July than a month earlier and the employment and prices subindexes also improved, according to HSBC.

"We expect policy makers to maintain their accommodative stance over the next few months to consolidate the recovery," said Mr. Qu.

The preliminary PMI figure, also called the HSBC flash China PMI, is based on 85% to 90% of total responses to HSBC's PMI survey each month, and is issued about one week before the final PMI reading.

Grace Zhu