On March 1, 2026, a cargo ship is anchored at the berth of Lianyungang Port Container Terminal in Jiangsu Province, China, loading and unloading containers.
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An official survey on Wednesday revealed that Chinese factory activity slumped in February as manufacturers suspended production and cargo shipments to celebrate the long holiday.
The official manufacturing purchasing managers index fell to 49 in February, lower than economists’ expectations of 49.1, the Office for National Statistics said. Measurements below 50 indicate contraction, and levels above that threshold indicate expansion.
This is the second negative month in a row, bringing the PMI reading in line with October 2025 and April 2025 levels. The official PMI stood at 49.3 in January, after briefly recovering in December.
The composite PMI, a broad measure that tracks activity across manufacturing and services, fell to 49.5 from 49.8 in January, official data showed.
The non-manufacturing PMI, which covers services and construction, fell 0.1 point to 49.5.
NBS chief statistician Huo Lihui attributed the decline to sluggish factory operations and production during the Lunar New Year holiday, as well as distortions caused by festival timing.
This year’s holiday will run from February 15th to February 23rd, making it the longest holiday on record compared to last year’s eight-day break from late January to early February.
However, private surveys point to a sharp recovery in manufacturing activity last month. S&P Global’s RatingDog China Integrated Manufacturing PMI rose to 52.1 in February, the highest level since December 2020.
Wednesday’s announcement said the activity was supported by strong new export orders. “International demand has rebounded markedly, with new export orders increasing at the most significant pace since September 2020.”
Goldman Sachs said the private survey will be conducted in mid-month on a relatively small group of export-oriented manufacturers, while the official survey will be compiled at the end of the month on a larger sample of more than 3,000 companies.
Preliminary official figures point to increases in holiday travel, entertainment spending and duty-free shopping. The country will release consumer and producer inflation figures for February on Monday.
The world’s second-largest economy has struggled to eliminate deflationary pressures since the end of the pandemic, weighed down by a prolonged real estate downturn and a weak outlook for the job market.
The Chinese government is scheduled to announce a series of economic targets in parliament on Thursday. Economists had largely expected policymakers to lower their growth target this year to a range of 4.5% to 5% from the “around 5%” target for the past three years.
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the upcoming economic planning conference will shed some light on the Chinese government’s future policy stance, and expects the government to expand investment “moderately” if growth momentum continues to weaken.
