The PMI, which was launched in January last year, rose to 55.3 from 52.1 in February.

A reading over 50 indicates an expansion of activity while one below 50 suggests contraction.

"The PMI has been higher than 50 for 15 consecutive months since January 2005, indicating that China's manufacturing economy is in the middle of a rising cycle," the association, which compiles the index on behalf of the National Bureau of Statistics, said.

The PMI sub-index for new orders was 60.7 in March, up 5.0 points from February and the highest level in 11 months; the sub-index for export orders rose 4.8 points to 58.7 in March, showing export demand was rising, the group said in a statement.

It quoted a government economist, Zhang Liqun, as saying the March report showed that China's economy had begun trending up and that vigilance was needed to prevent overheating.

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