An index for small and mid-size manufacturing in China is at a six-month high

KEY POINTS

• Caixin/IHS Markit releases its China February manufacturing PMI reading, which came in at 51.6.
• That metric focuses on smaller businesses in China compared to the official PMI reading, which was released on Wednesday.

Chinese workers at a cloth factory in Huaibei, China.

Jie Zhao | Corbis | Getty Images

A survey focused on small and mid-size manufacturing in China surpassed expectations to hit a six-month high in February.

The Caixin/Markit manufacturing Purchasing Managers' Index for February came in at 51.6. Economists polled by Reuters expected the private Caixin/Markit PMI to come in at 51.3 in February versus 51.5 in January.

A reading above 50 indicates expansion, while a reading below that signals contraction.

The Caixin/Markit survey focuses on small and mid-size businesses in China and comes after the world's second-largest economy reported official February manufacturing PMI on Wednesday that hit an 19-month low of 50.3.

Even though growth from production in February slowed from the pace seen in January, total new work expanded at a slightly faster pace and business confidence strengthened to its highest level for nearly a year, Caixin and Markit said in a joint press release.

There were also indications of economic expansion in the indices reflecting stocks of finished products and stocks of purchases, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin.

"For now, the durability of the Chinese economy will persist. Looking ahead, whether demand generated from the beginning of work in March will gain strength will be key in determining China's economic direction for 2018," Zhong added in the release.

China's economy surprised on the upside in 2017, but economists expect a managed slowdown this year to hit growth.

The Chinese government is cracking down on high debt levels and heavily polluting industries while engineering a transition toward a services and consumption-led economy.

Caixin/Markit is set to release its China services PMI reading for February next Monday.