China NBS Manufacturing PMI Rebounds in February as US Tariffs Loom

Notably, the manufacturing sector expanded after briefly contracting in January, the first contraction since Q3 2024.

Manufacturing Recovery and Industry Trends

CN Wire highlighted key trends in February’s PMI data:

The manufacturing sector saw demand and production expand after January’s contraction.
Industries reporting PMIs above 54.0 included non-ferrous metal smelting and rolling processing, general equipment, and electrical machinery and equipment.
In contrast, textile and apparel, and petroleum, coal, and other fuel processing had PMIs below the 50 neutral point.
Price indices continued to rise, which could ease deflationary concerns.

Assessing broader trends, CN Wire noted:

“In February, the Composite PMI Output Index was 51.1%, up by 1.0 percentage points from the previous month, remaining in the expansion zone, indicating accelerated recovery and development of enterprise production and business activities post-Spring Festival in China. The Manufacturing Production Index and Non-Manufacturing Business Activity Index, which constitute the Composite PMI Output Index, were 52.5% and 50.4% respectively.”

Demand and Production Key to Domestic Growth

February’s figures could be crucial for China’s economic outlook. Improving demand and productivity may boost job creation and consumer sentiment. Rising consumer confidence could make Beijing’s stimulus efforts more effective in supporting household income and driving consumption.

However, the post-Chinese New Year rebound in manufacturing sector output could reflect front-loading ahead of US tariffs on Chinese goods. This week, President Trump announced that 10% tariffs on imports from China would be effective from Tuesday, March 4. Trump also plans to impose sweeping tariffs on autos, pharmaceuticals, and semiconductor chips.