Investing.com-- Chinese manufacturing activity grew more than expected in February, government data showed over the weekend, as local businesses continued to benefit from stimulus measures released in 2024.
But investors were watching to see whether a brewing trade war between the U.S. and China, amid increased tariffs from President Donald Trump, will stymie activity in the coming months, especially as U.S. export demand comes under pressure.
China’s manufacturing PMI grew 50.2 in February, more than expectations of 50.0 and moving back into expansion territory after falling to 49.1 in the prior month. A reading above 50 indicates expansion.
Activity was boosted by strong local demand during the Lunar New Year holiday, which helped businesses weather an initial salvo of 10% tariffs from Trump. The U.S. President has outlined more potential trade duties.
Non-manufacturing activity fared better due to increased local demand, with the PMI rising 50.4 in February, more than expectations of 50.3 and picking up from 50.2 seen in the prior month.
This bought Chinese composite PMI to 51.1 in February from 50.1 in the prior month.
Chinese business activity picked up through late-2024 following a salvo of extensive stimulus measures from Beijing. But investors are now watching for more government support, especially in the face of increased U.S. trade headwinds.