China’s economy is stabilising after the slowdown of recent months, data suggest, easing worries about a hard landing but raising questions about the government’s commitment to rebalancing.

A slump in manufacturing and property, China’s traditional growth drivers, has slammed global commodity prices and shrunk profits at Chinese groups tied to the old growth model. Planned lay-offs in steel, coal and other overcapacity sectors have led to labour unrest and concern over unemployment.

However, recent data suggest the tide is turning, at least temporarily. The Caixin purchasing managers’ indices for both manufacturing and services rose sharply in March. The manufacturing PMI hit 49.7 in March, its highest level in more than a year and a much better reading than expected. Caixin’s services PMI rose to 52.2 in March from 51.2 in February. The 50-point level separates contraction from expansion.