China’s factory activity shrank again in February, extending a stretch of contraction in the official manufacturing data even as separate private readings suggested some pockets of strength. The National Bureau of Statistics reported the official manufacturing purchasing managers index, or PMI, slipped to 49 in February from 49.3 in January, a level that indicates contraction because the index is measured on a 0-to-100 scale with readings below 50 signaling contraction.
The official figure adds another signal of stress in manufacturing activity as China faces subdued domestic consumption and demand, analysts said. The data also follows a brief break in the prior trend: December’s manufacturing PMI had risen to 50.1, ending eight consecutive months of contraction, before February returned to negative territory, according to the National Bureau of Statistics’ monthly survey of factory managers.
National Bureau of Statistics chief statistician Huo Lihui said the weaker official readings reflected seasonal factors, including the Lunar New Year holiday. He described the holiday as lasting nine days in mid-February this year, a timing that can affect production and orders captured in the survey.
Alongside the official PMI, a separate private survey by RatingDog, a Chinese credit research and analysis company, reported a different direction for February. RatingDog’s manufacturing PMI rose to 52.1 in February from 50.3 in January, staying in expansion territory and reaching what the report described as the sharpest expansion since December 2020. The private survey typically tracks trends among smaller firms and those that are more export-focused, and its results appeared to point to improved momentum in external demand.
RatingDog founder Yao Yu said overseas demand rebounded in February and was strong, and that new export orders grew notably. The private results echoed broader expectations that manufacturers could get support from demand outside China even as domestic demand remains soft.
In a research note, Lynn Song, chief economist for Greater China at ING Bank, said the “mixed bag of manufacturing PMI data suggests a similar trajectory to what we observed in 2025.” She said resilient external demand was continuing to drive growth while domestic demand was “disappointingly soft,” framing the official and private gauges as moving in different directions.
Other analysts pointed to potential relief from U.S. tariff policy and to trade negotiations. Zichun Huang, a China economist at Capital Economics, said the Supreme Court ruling last month against President Donald Trump’s reciprocal tariffs could provide a “small boost” to exports and manufacturing activity because it resulted in the reduction of U.S. tariffs globally, including for China. Huang also said Trump’s planned meeting with Chinese leader Xi Jinping in April could be positive for Chinese manufacturers if it brings an extended trade truce.
Even with possible export support, analysts said China’s domestic demand weakness is likely to remain a problem. They pointed to a prolonged downturn in the real estate sector that has weighed on consumption and investment, and they said that drag is expected to continue even if external conditions improve.
China is set to unveil its economic growth target at its annual national congress that begins Thursday, with economists expecting a target of 4.5% or above. The congress, which is expected to last around a week, will also approve Beijing’s five-year policy blueprint for 2026-2030, including an expected focus on boosting technological advancements and self-reliance.