Manufacturing activity in China expanded at its fastest pace in almost a year last month, according to latest industry data.

The official purchasing managers' index (PMI) hit 50.9 in March, the highest since April 2012 when the figure stood at 53.3, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP).

A reading above 50 indicates expansion.

The latest figures indicate the Chinese economy – the second largest in the world – is continuing to improve.

PMI is a widely watched barometer of the health of China's economy, with The March reading improved from 50.1 in February and signalled the sixth consecutive month of expanding manufacturing activity in the country.

According to a CFLP statement, the rebound in PMI last month was led by increasing new orders as demand improved, driven by exports and investment.

China's economy expanded 7.8 per cent in 2012, its slowest pace for 13 years.

But growth accelerated in the final three months of last year to 7.9 per cent, breaking seven straight quarters of weakening expansion.