Beijing, 1 March 2025 — China’s manufacturing sector expanded at its fastest pace in three months this February, with official data showing an increase in new orders and production volumes. However, the ongoing trade conflict with the United States continues to raise concerns about the long-term sustainability of this growth.
According to the National Bureau of Statistics, the official Purchasing Managers’ Index (PMI) rose to 50.2 in February, up from 49.1 in January, marking the highest reading since November and surpassing analysts’ expectations. The non-manufacturing PMI, which covers services and construction, also showed improvement, climbing to 50.4 from 50.2. These figures suggest that recent government stimulus measures may be stabilizing the economy ahead of China’s annual parliamentary session, set to begin on March 5.
Despite the positive momentum, several key indicators remained in negative territory. New export orders, factory gate prices, and employment levels continued to contract, albeit at a slower rate. Employment, however, reached a 22-month high, signaling a potential recovery in labor demand.
China’s $18 trillion economy met its 2024 growth target of “around 5%,” but concerns persist over how effectively policymakers can revive sluggish domestic demand. Analysts warn that seasonal factors, such as the Spring Festival, may have temporarily influenced February’s manufacturing data, making it necessary to wait for additional economic reports, including trade data expected on March 7.
The broader economic outlook remains clouded by rising trade tensions with the United States. Former President Donald Trump’s administration had initiated a tariff war, and the current U.S. government recently imposed an additional 10% duty on Chinese goods, with another 10% increase set for March 4. This brings the cumulative tariff rate to 20%, significantly lower than the 60% Trump had previously threatened but still a major point of contention.
In response, China’s Commerce Ministry expressed its willingness to return to negotiations, cautioning that failure to do so could lead to retaliatory measures. Meanwhile, top Chinese Communist Party officials convened to discuss strategies for mitigating external economic shocks.
As Beijing prepares to unveil fresh policy initiatives at its upcoming political summit, investors will closely watch for further economic support measures, particularly for the struggling property sector and debt-ridden local governments. The extent to which these policies can offset mounting global pressures remains to be seen.
Source: Reuters
