Kenneth Rapoza, Forbes.com

China’s National Bureau of Statistics data over the weekend showed signs of marginal improvement in national manufacturing. Bad news for China hard landing believers.

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The June manufacturing PMI (Purchasing Managers Index) came in better than expected at 50.2 for June, while market consensus estimates had it at 49.9 versus the May survey results of 50.4.

The sub-indices suggest some stabilization in industrial activity and improvement in domestic demand, but a continued deteriorating external outlook. Overall, the PMI report supports the view that the Chinese government’s efforts to stabilize growth are starting to take effect and that growth will bottom in the second quarter, improving from June onward, Barclays Capital analysts led by Jian Chang said from Hong Kong on Sunday.

Moreover, the rise in the seasonally adjusted headline PMI rose to 50.7 from a recent low of 50.1 in May, lends further support. Any PMI reading over 50 is “good news”. It’s only negative when the reading is in a lower 50 range from previous months.

The PMIs for large and medium enterprises moderated to 50.6 and 50, respectively, from 51.1 and 50.8 in May, while the PMI for small enterprises recovered to 47.2 from 45.2. By sub categories, the production index (25% weight of the Bureau’s PMI survey data) slowed to 52 from 52.9 in May and 57.2 in April, suggesting some stabilization in activity.

New orders (30% weight) edged lower to 49.2 from 49.8 and 54.5 previously. Considering the drop in new export orders in June to 47.5 from 50.4 and 52.2, Chang now thinks that domestic orders likely improved last month, suggesting more demand from consumers and therefore local corporates tied to the domestic economy.

A big snag remains in the weakening of export orders in line with HSBC “flash” PMI, showcasing the fact that external demand for Made in China goods is the biggest risk facing the Chinese economy, Barclays Capital said.