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(CNN Business) —  

Markets in China dipped Monday despite encouraging manufacturing data and a couple of positive IPOs. Analysts said the Chinese economy is not out of the woods yet, and investors are still concerned about escalating US-China trade tensions.

Official and private surveys of China’s manufacturing activity rose more than expected in September, data showed Monday.

The Caixin Purchasing Managers Index, a privately-conducted survey, expanded at the quickest pace in 19 months, reaching 51.4 in September. It was up from 50.4 in August and beating an estimated 50.2 in a Reuters poll of analysts.

The government’s official PMI for September also beat analyst estimates, increasing to 49.8 from the 49.5 it registered in August. However, that’s still below the 50-point level that indicates growth over the previous month.

But shares of several Chinese companies dropped after the United States launched investigations into some and hit others with sanctions. US authorities are also reportedly considering delisting Chinese companies from American stock markets.

China’s Shanghai Composite Index dropped 0.9%. But Hong Kong’s Hang Seng (HSI) Index reversed opening losses and traded higher. The index closed up 0.5%, helped by a blockbuster IPO.

Budweiser APAC, the Asia unit of the world’s largest brewer AB InBev (BUD), jumped more than 4% on its first trading day in Hong Kong.

China’s new Nasdaq-style Star Market in Shanghai was also cheering after smartphone maker Transsion surged more than 60% on its first day of trading.

A ‘false dawn’

Despite the cheer for China’s manufacturing sector from Monday’s data, analysts warn that the Chinese economy is still under a lot of pressure.

The figures on Monday likely represent “a false dawn,” Julian Evans-Pritchard, senior China economist for Capital Economics, wrote in a research note on Monday.

“This is unlikely to mark the start of a turnaround,” Evans-Pritchard said, highlighting signs of slowing construction and real estate activity.

He expected the People’s Bank of China will have to launch more decisive monetary easing to support the faltering economy later this year.

Ting Lu, an economist for Japanese brokerage firm Nomura, agreed the rebound is unsustainable.

“An escalation of US-China trade tensions remains likely, while the slowing of global growth has been another drag on China’s exports,” he said.

US moves hit Chinese firms

China’s economic slowdown has been compounded by its months-long trade war with the United States. Senior officials from the two countries are expected to meet in Washington later this month for trade talks.

Though both sides have made concessions in recent weeks, tensions remain high. And the United States’ latest moves are dragging down Chinese stocks.

Several Chinese technology companies fell heavily Monday after the US International Trade Commission, an anti-trust body, decided to launch investigations against them for alleged patent infringement on chip products.

TCL Electronics tumbled 2.7% in Hong Kong. Its parent TCL Corp also dropped 1.9% on the Shenzhen market. Qingdao Hisense Electric, a major Chinese appliance and electronics maker, lost 3.3% in Shanghai.

Lenovo (LNVGF) fell 0.8% in Hong Kong. Its parent company, Legend Holdings, also dropped 1.5%.

Cosco Shipping Energy Transportation, a unit of Chinese conglomerate Cosco Group, plummeted nearly 22% in Hong Kong, after it confirmed Sunday that one of its subsidiaries was sanctioned by the US Treasury Department.

It was one of several Chinese companies the US imposed sanctions on for their alleged involvement in transporting oil from Iran.

The White House is also reportedly considering delisting Chinese companies from the US exchanges and banning US investments in China, according to multiple news outlets.

American officials sought to downplay the reports, with Bloomberg quoting a US Treasury spokesperson as saying there are no plans to block Chinese companies from US stock exchanges “at this time.” But that didn’t stop markets from worrying.

The news just “added another layer of muck to an already befouled trade war narrative,” wrote Stephen Innes, a market strategist for Asia Pacific at Axi Trader.