The Purchasing Managers Index (PMI) in China, a gauge of manufacturing activities, rose slightly in January to 50.5 percent, from previous month’s 50.3 percent, the China Federation of Logistics and Purchasing (CFLP) said Wednesday.

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

The reading was the highest since October, suggesting that manufacturing “has stabilized somewhat due to supportive fiscal and monetary policies,” the Bloomberg quoted Liu Ligang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltds as saying.

“Stronger-than-expected PMI also provides solid evidence that a hard landing for China’s economy is very unlikely.”

The median estimate in a Bloomberg News survey of 17 economists was 49.6.

The new orders gauge of the PMI expanded in January by 0.6 percentage points to 50.4 percent, after staying below the 50 break-even mark for two straight months.