Manufacturing activity in China might bounce back strongly in July, according to HSBC’s flash manufacturing purchasing managers index (PMI) for the nation. The gauge, which reads 49.5, hits a nine month high but is still below the 50 critical point. A reading below 50 indicates contraction. The official PMI was 50.2 in June, which indicated the manufacturing sector expanded during the month. As earlier policies aimed at stemming inflation and property bubbles began to work, China's gross domestic product slowed to 7.6% in Q2 2012, the first time the rate fell below the 8% psychological barrier in three years. The central government has ratcheted up measures to reinvigorate growth, including two interest rate cuts last month.