consumption may pick up as the country has stepped up policy efforts to redress the mismatch between consumption demand and supply

Specifically, consumption may pick up as the country has stepped up policy efforts to redress the mismatch between consumption demand and supply, with full-year retail sales growth likely to reach 8.5 percent year-on-year, he said.

Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin, said in the Caixin report there were signs of a short-term economic recovery, though downward pressure may remain a long-term challenge. Overall demand and business confidence didn't improve in August, and industrial prices trended down, Zhong said.

The State Council's Office of Financial Stability and Development Committee, the top body guiding financial regulation, met over the weekend and pledged stronger countercyclical macroeconomic policies. Authorities will step up efforts to smooth out the "transmission of monetary policy" in the economy and better coordinate fiscal policy with monetary and financial policy, meeting participants decided.

Hua Changchun, chief economist at Guotai Junan Securities, said the manufacturing PMI may not rise continuously in the short term as authorities aren't relying on strong stimulus but economic restructuring like promoting high-tech manufacturing and consumption to deal with downside pressure. But the likelihood of a notable drop in PMI readings is limited, as consumption resilience, infrastructure investment recovery and policy support will shield the economy from any major downturn, Hua said.

The official manufacturing PMI inched down from 49.7 in July to 49.5 in August, the fourth consecutive month of contraction, the National Bureau of Statistics said on Saturday.