China’s manufacturing activity grew at its fastest pace in three months in February, despite the looming threat of new tariffs from Donald Trump this week.
An official survey showed that production at Chinese factories returned to growth last month, driven by an increase in new orders and purchase volumes.
According to the National Bureau of Statistics (NBS), the official manufacturing purchasing managers’ index (PMI) rose to 50.2 in February, up from 49.1 in January.
This figure surpasses the 50-point threshold that separates contraction from expansion.
Trump Trade War With China
NBS statistician Zhao Qinghe attributed the improvement in PMI data to factories resuming production after the spring festival holiday, a period when many manufacturers temporarily shut down.
Chinese officials are set to discuss the state of the economy during their annual parliamentary meeting in Beijing on Tuesday—the same day Trump has said a 10% tariff increase on Chinese imports will take effect.
The new tariffs could weaken demand for Chinese goods in the U.S. and may lead China to redirect surplus products to Europe, potentially driving down European inflation while putting pressure on European manufacturers.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, noted the uncertainty surrounding the situation. “It remains to be seen how much the U.S. will raise tariffs next week, [and] how damaging it will be for China’s export orders,” he said.
