The Chinese Markit/Caixin manufacturing PMI increased to 49.7 in March from 48.0 in February. The increase was driven by rises output, total new orders and output prices. But companies continued to shed jobs.

"All categories of the index showed improvement over the previous month. The output and new order categories rose above the neutral 50-point level, indicating that the stimulus policies the government has implemented have begun to take hold," Dr. He Fan, Chief Economist at Caixin Insight Group, said.

"However, considering that current conditions remain uncertain, the government needs to continue with moderate stimulus measures to reinforce market confidence," he added.