The improvement eased pressure on communist leaders who say their priority is longer-term reforms aimed at steering the economy to slower, more sustainable growth based on domestic consumption instead of exports and investment.
Some analysts say, however, that the recovery could be short-lived and weaken later this year. They say the growth uptick has been driven largely by a government mini-stimulus of higher spending on construction of railways and other public works.
"China's economic growth initially stabilized at about the 7.5 percent range but the fundamentals are still not stable and growth driven by the domestic market still is weak," said economist Zhang Lijun in the Chinese group's statement.
HSBC said higher factory output was supported by stronger demand both in China and abroad. It said foreign business saw its strongest growth in nearly a year and some companies responding to its survey cited better U.S. demand in particular.
HSBC said the employment component of its survey showed an expansion for the first time since March. It said that should underpin consumer spending, helping to support a recovery.
