The latest manufacturing data in China suggest that the world's third-largest economy is showing some signs of recovery.

Government economists announced Wednesday that manufacturing shrank again in January, but not as much as in the previous months.   

The state-sanctioned China Federation of Logistics and Purchasing says the country's purchasing managers index rose to 45.3, up from 41.2 in December.  A PMI reading above 50 indicates growth, while a number below 50 indicates contraction.

The data also show that demand for Chinese products declined at a slower rate in January than in December.

China's state media also reported Wednesday that Chinese banks loaned a monthly record of $175 billion in January.

The global economic slump has hit Chinese manufacturers as international demand for Chinese textiles, toys and other goods declined and real estate, auto sales and other sectors declined domestically.   

The government said earlier this week that an estimated 20 million domestic migrant workers have lost their jobs.

The government in November unveiled a $600 billion stimulus package aimed at boosting demand through bigger spending and easier credit.  

Some information for this report was provided by AFP, AP and Reuters.