China's manufacturing sector continued to warm up in August as a key indicator went up for a third straight month, while the non-manufacturing sector sustained its vibrancy, releasing signals of strengthening economic momentum.

The purchasing managers' index (PMI) for China's manufacturing sector came in at 49.7 in August, up from 49.3 in July, according to the National Bureau of Statistics (NBS).

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

Among the 21 surveyed industries, 12 reported expansion in August, up from 10 a month earlier. There was an overall improvement in the manufacturing climate, NBS statistician Zhao Qinghe said.

The sub-index for production and new orders in the manufacturing sector stood at 51.9 and 50.2, respectively, up 1.7 and 0.7 percentage points from the previous month.

Insufficient market demand is still the major problem faced by enterprises in the manufacturing sector, said Zhao, adding that the recovery foundation of the industry needs to consolidate.

Zhao noted that the service sector sustained the recovery momentum in August, boosted by consumption during the summer vacation. The construction industry also registered quicker expansion.

The PMI for the non-manufacturing sector came in at 51 in August, standing well above the boom-or-bust line for eight consecutive months.

The sub-index for the service sector was 50.5 in August. Business activities of transport, accommodation, and catering stood well above 55 for two consecutive months.

The construction sector's sub-index was 53.8 this month, up from 51.2 in July, and the optimism about the sector's prospects has remained high, the NBS data showed.

To further energize business vitality, Chinese authorities have rolled out several policies to boost domestic demand, reassure entrepreneurs, and shore up confidence.

The National Development and Reform Commission (NDRC) released a notice last month, vowing to spur consumption of a wide range of items and services, including new energy vehicles, home appliances, electronics, catering, cultural and tourism sectors, as well as that in rural areas.

The NDRC also unveiled a series of detailed measures ranging from fair market access to stronger financial support and better government services designed to tackle prominent problems facing private enterprises and build their confidence.

The People's Bank of China conducted some policy rate adjustments earlier this month, including the interest rate of the one-year medium-term lending facility, seven-day reverse repos, and the standing lending facility, and analysts believe that the interest rate lowering can reduce the financing cost for the real economy, stabilize expectations and growth.

With the effect of the supportive measures gradually playing out, the economy will maintain its stable and sound trend in the second half of this year, said Yuan Da, an official with the NDRC.