China’s Manufacturing Activity Surges in February Amid Stimulus, Trade War Risks Loom

China’s manufacturing sector expanded more than expected in February, driven by strong domestic demand and government stimulus. Official data showed the manufacturing Purchasing Managers’ Index (PMI) rose to 50.2, exceeding forecasts of 50.0 and rebounding from January’s 49.1. A reading above 50 signals growth.

The increase was fueled by Lunar New Year demand, helping businesses withstand initial U.S. tariffs. However, concerns persist over escalating trade tensions between the U.S. and China as President Donald Trump considers additional duties, which could weigh on future exports.

Non-manufacturing activity also strengthened, with the services PMI climbing to 50.4, surpassing expectations of 50.3 and improving from 50.2 in January. This lifted the composite PMI to 51.1 from 50.1, signaling broad economic expansion.

China’s economic activity has rebounded since late 2024 following a series of stimulus measures aimed at bolstering growth. While these policies have supported recovery, investors remain cautious about the long-term impact of U.S. trade restrictions. Many are looking for further government intervention to sustain momentum amid rising geopolitical and economic uncertainties.

As the global economy navigates shifting trade policies and inflationary pressures, China’s resilience will be closely monitored. Future growth depends on Beijing’s ability to counteract external risks and maintain internal stability.