SHANGHAI, Dec 9 (Reuters) - China"s yuan firmed on Wednesday after upbeat factory price data signaled a continued recovery in the world"s second largest economy, and as the central bank set a stronger midpoint. The People"s Bank of China set the midpoint rate at 6.5311 per dollar prior to market open, 9 pips firmer than the previous fix of 6.5320, its strongest since June 26, 2018. The spot market opened at 6.5280 per dollar and was changing hands at 6.5275 at midday, 47 pips firmer than the previous late session close. China"s factory gate prices fell at a slower pace in November, adding to signs that the world"s second-largest economy is rebounding from the COVID-19 pandemic, but consumer prices unexpectedly declined for the first time in over a decade. Recent data showed China"s exports grew at the fastest pace in almost three years in November while manufacturing activity also expanded at its quickest rate in more than three years that month. "Part of the currency"s recent strength may be due to the fact that coronavirus-related demand for Chinese exports has proved resilient, thanks in part to the resurgence of COVID-19 cases in developed markets," Thomas Mathews, markets economist at Capital Economics, said in a report. "But a more important factor, is the differential between government bond yields in China and the US," he added. The yuan"s advance was limited by the latest Sino-U.S. tensions, however. China summoned the acting top U.S. diplomat in Beijing on Tuesday to protest U.S. sanctions on Chinese officials over Hong Kong, and vowed to take "reciprocal" retaliation. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.61, firmer than the previous day"s 95.47. The global dollar index fell to 90.811 from the previous close of 90.916. The offshore yuan was trading at 6.504 per dollar by midday. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan"s value, traded at 6.6694, -2.07 percent away from the midpoint. One-year NDFs are settled against the midpoint, not the spot rate. The yuan market at 4:25AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5311 6.532 0.01% Spot yuan 6.5264 6.5322 0.09% Divergence from -0.07% midpoint* Spot change YTD 6.69% Spot change since 2005 26.82% revaluation Key indexes: Item Current Previous Change Thomson 95.61 95.47 0.2 Reuters/HKEX CNH index Dollar index 90.811 90.916 -0.1 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People"s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.5025 0.37% * Offshore 6.6694 -2.07% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Luoyan Liu, Jindong Zhang and Andrew Galbraith; Editing by Simon Cameron-Moore)