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Analysts said the removal of the equity cap in the commercial vehicle sector, including trucks and buses, will also trigger more interest from foreign companies.

Analysts suggested more mergers and acquisitions are going to take place in the sector in the coming three to five years.

Analysts say strong overall demand has been firing up production. "Overall, the PMI data suggested recovery momentum has more or less stayed," chief China economist at UBS Wang Tao told Bloomberg on Monday.

Analysts said that last year, Sino-US trade tensions and the US Fed's monetary tightening process increased the concerns of global investors.

And in May, China National Offshore Oil Corp and Shell Nanhai BV officially kicked off production of their second ethylene cracker plant at their Nanhai petrochemicals complex in Daya Bay in Huizhou.