Although there was a slight pick-up in China's official Purchasing Managers' Index for July, it does not signal the economy is out of the woods yet.

The index, which tracks large enterprises in the mainland, rose to 50.3 from 50.1 in June. But a cloudy outlook remains, especially considering the divergent reading of the HSBC PMI, which mainly tracks small enterprises, fell to 47.7 in July from 48.2 in June. A PMI reading of more than 50 indicates the expansion of manufacturing activities, while a reading of less than 50 indicates contraction.

The economic prospects have certainly improved as China has unveiled a series of mini-stimulus measures in the past weeks following GDP growth of 7.5 percent year-on-year in the second quarter.