China's manufacturing activity has improved in October according to official and a private sector data, raising hopes of an economic recovery in the world's second largest economy.

Official reports from the National Bureau of Statistics said that the country's Purchasing Managers Index (PMI) surged to 50.2 in the month from 49.8 in the previous. This is just below the 50.3 mark estimated by a Reuters poll.

It is the first time since July that the index has climbed out of the contractionary territory - a reading below 50 indicates a slowdown in the activity.

"The continued rebounding of sub-indexes including new orders, export orders and quantity of purchases, indicates companies' de-stocking process has basically ended," said Zhang Liqun, a researcher with the Development Research Centre of the State Council, in a statement released with the index.

"We expect China's economic growth will end its decline and rebound slightly in the future."

Separately, manufacturing data released by HSBC, which concentrates more on smaller, export focused companies, also showed improvement.

The HSBC purchasing Managers index gained to 49.5 in October from 47.9 in September, showing an unusual variation from the preliminary reading of 49.1 reported in the previous week.

"October's final PMI rose to an eight-month high, implying that China's industrial activity continues to bottom out following a modest pick-up last month," wrote HSBC economist Hongbin Qu in a statement released with the data.

"This is mainly driven by the increase of new orders, thanks to the filtering-through of the earlier easing measures, while exports outlook remains challenging."

The latest data strengthens speculations that the overall economy will pick up in the final quarter of the fiscal year.

The economy had slowed to 7.4 percent annually in third quarter. The government has maintained a target of 7.5 percent or more for the full year.