After suffering contraction for as many as four months, China's manufacturing sector swung back to recovery in August, thanks to rebounding domestic demand.

The HSBC purchasing managers' index jumped from 47.7 in July to 50.1 in August this year. It may be noted here that a reading below 50 indicates contraction while a reading of above 50 indicates expansion in an economic sector.

The reading was in line with a preliminary reading recorded earlier in August. Earlier, official data also showed an increase manufacturing PMI to 51.0.

The increase in China's manufacturing PMI for the first time in four months in August also indicated that the second-largest economy of the world has shunned a sharp slowdown.

Stephen Green, a senior economist with Standard Chartered, said the economy is stabilizing but the recovery will be quite slow.

Commenting on the figures, Green said, "We are definitely stabilizing, but it's going to be a pretty weak to flat recovery."

Following the release of latest data about China's manufacturing sector, Asian shares jumped to a two-week high.