China's factory activity unexpectedly expanded in February as new orders improved, pointing to some resilience in the world's second-largest economy even as downward pressure builds and Russia's invasion of Ukraine heightens global uncertainty.
The official manufacturing Purchasing Manager's Index (PMI) registered 50.2 in February, remaining above the 50-point mark, which separates growth from contraction, and picking up a touch from 50.1 in January, data from the National Bureau of Statistics (NBS) showed on Tuesday.
Analysts had expected the PMI to ease to 49.9.
China's economy rebounded strongly from a pandemic-induced slump in 2020, though momentum started to flag in the summer of last year, as a debt crisis in the property market and strict anti-virus measures hit consumer confidence and spending.
Policymakers have vowed to stabilize growth this year and all eyes are on the annual meeting of its top legislative body that begins on March 5 during which the government will unveil economic targets for the year and likely more stimulus measures.
Russia's invasion of Ukraine has raised fresh risks for the global economy, adding to months-long strains for China's factories from worldwide supply chain snags.
New orders grew for the first time since August last year, as demand improved following the Lunar New Year holidays. However, the growth in production slowed, with a sub-index standing at 50.4, compared with 50.9 in January.
"New orders returned to the expansionary territory, suggesting that manufacturing market demand has been quickly released since the holiday," said Zhao Qinghe, senior statistician at the NBS, in a statement accompanying the data release.
"After the Spring Festival, manufacturing activities have gradually returned to normal."
A separate private PMI survey also showed China's factory activity returned to growth last month, buoyed by expanding new orders.
However, China is still battling sporadic Covid-19 outbreaks across the country, while imported cases from Hong Kong surged. Suzhou, a Chinese industrial hub in the east, had shut down some factories temporarily to stop the spread of Covid-19 there.
A survey on China's sprawling services sector showed growth picking up in February.
China's official composite PMI, which combined manufacturing and services, stood at 51.2 in February compared with 50.1 in January.