The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of the country's manufacturing activity, rose to 51.9 in January from the final reading of 51.5 in December, HSBC said on Thursday.

The figure, which stood at a 24-month high, was the latest indication of a rebound in the world's second-largest economy and a booster for market confidence.

A reading above 50 indicates expansion from the previous month, while one below 50 indicates contraction.

The index has now been in expansionary territory for three straight months, signaling steady growth for China's manufacturing sector.

"Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases," Qu Hongbin, chief China economist with HSBC, said in a statement.

HSBC said the sub-indices for output, new orders and employment, which account for three-quarters of the flash PMI, all improved in January to hover above 50.

"Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months."

The preliminary PMI figure — also called the HSBC Flash China PMI — is based on 85 percent to 90 percent of total responses of a survey to purchasing executives from over 420 manufacturing firms, and is issued about one week before the final PMI reading.