Group 1: Manufacturing Sector Insights - The manufacturing PMI for March 2026 is 50.4%, an increase of 1.4 percentage points from the previous month, marking a return to the expansion zone after two months[7] - The new orders index and production index are at 51.6% and 51.4%, respectively, both above the critical point, indicating strong demand recovery[13] - Small and medium-sized enterprises' PMIs have significantly improved, with small enterprises at 49.0% (up 1.5 percentage points) and medium enterprises at 49.3% (up 4.5 percentage points) from the previous month[10] Group 2: Price and Cost Pressures - The main raw material purchase price index is at 63.9%, up 9.1 percentage points, while the factory price index is at 55.4%, up 4.8 percentage points, indicating rising input costs due to geopolitical tensions[16] - The procurement volume index has risen to 50.9%, reflecting increased purchasing activity driven by demand recovery[18] - The inventory indices for raw materials and finished products are at 47.7% and 46.7%, respectively, indicating a slowdown in inventory depletion[18] Group 3: Non-Manufacturing Sector Performance - The non-manufacturing business activity index is at 50.2%, up 0.5 percentage points, with significant internal differentiation in the service sector[20] - The construction business activity index is at 49.3%, up 1.1 percentage points, but still indicates a low level of activity, with new orders at 43.5%[23] - Consumer services sectors such as retail and hospitality are below the critical point, suggesting a need for policy support to boost consumer confidence[20] Group 4: Risks and Future Outlook - Rising raw material prices may squeeze profit margins for downstream enterprises, potentially suppressing future investment and production willingness[26] - The ongoing geopolitical tensions in the Middle East remain a critical variable, with sustained high oil prices likely to exacerbate cost pressures in downstream industries[26] - Real estate demand needs to be stimulated, and geopolitical risks could disrupt market stability[27]

Manufacturing Sector - March manufacturing PMI improved to 50.4%, up 1.4 percentage points month-on-month, indicating a return to expansion[3] - The production index rose by 1.8 percentage points to 51.4%, while new orders increased by 3.0 percentage points to 51.6%[14] - Industrial raw material prices have rebounded significantly, with March PPI expected to rise by approximately 0.3% year-on-year[20] Non-Manufacturing Sector - Construction PMI increased by 1.1 percentage points to 49.3%, benefiting from the gradual resumption of projects post-holiday[22] - Service sector PMI rose to 50.2%, a 0.5 percentage point improvement, although new orders remain weak[30] Economic Outlook - Q1 GDP is projected to grow by approximately 5.0% year-on-year, supported by AI demand and fiscal spending[6] - The growth forecast includes primary, secondary, and tertiary industries at approximately 3.5%, 5.2%, and 5.0% respectively[34] - Input inflation may pressure profits in downstream enterprises, necessitating timely policy responses to support economic recovery[33] Risks - Potential risks include unexpected policy changes and a possible recession in the U.S. economy impacting domestic exports[35]

Core Viewpoint - In March 2026, China's Purchasing Managers' Index (PMI) returned to the expansion zone, indicating a recovery in economic sentiment with manufacturing PMI at 50.4%, non-manufacturing business activity index at 50.1%, and composite PMI output index at 50.5% [1]. Group 1: Manufacturing PMI - The manufacturing PMI rose to 50.4% in March, reflecting increased market activity as companies resumed operations post-Spring Festival [2]. - Both production index and new orders index improved, reaching 51.4% and 51.6% respectively, indicating accelerated production activities and improved market demand [2]. - Large, medium, and small enterprises all saw a rise in PMI, with large enterprises at 51.6%, medium at 49.0%, and small at 49.3%, showing significant improvement in sentiment for smaller firms [2]. Group 2: Key Industries - High-tech manufacturing PMI stood at 52.1%, marking 14 consecutive months above the critical point, indicating a positive development trend [3]. - Equipment manufacturing and consumer goods industries also showed expansion with PMIs of 51.5% and 50.8% respectively [3]. - The price index for major raw materials surged, with purchasing price index at 63.9% and factory price index at 55.4%, reflecting a significant increase in market prices [3]. Group 3: Non-Manufacturing PMI - The non-manufacturing business activity index rose to 50.1%, indicating an improvement in the non-manufacturing sector [5]. - The service sector's business activity index reached 50.2%, with certain industries like telecommunications and financial services showing strong growth [5]. - The construction industry also saw an improvement, with a business activity index of 49.3%, reflecting a recovery in construction projects post-holiday [5]. Group 4: Composite PMI - The composite PMI output index increased to 50.5%, indicating an overall positive trend in production and business activities across sectors [6]. - The manufacturing production index and non-manufacturing business activity index contributed to this increase, standing at 51.4% and 50.1% respectively [6].

Group 1: Manufacturing PMI Insights - In March, the Manufacturing Purchasing Managers' Index (PMI) rose to 50.4%, indicating a return to the expansion zone, driven by increased market activity post-Spring Festival [4] - Both production index and new orders index improved, reaching 51.4% and 51.6% respectively, reflecting accelerated production activities and improved market demand [4] - Large, medium, and small enterprises all showed PMI increases, with large enterprises at 51.6%, medium at 49.0%, and small at 49.3%, indicating a general improvement in economic conditions [4][5] Group 2: Sector-Specific Performance - High-tech manufacturing PMI reached 52.1%, marking 14 consecutive months above the critical point, indicating a positive development trend [5] - The equipment manufacturing and consumer goods sectors also saw PMIs of 51.5% and 50.8%, respectively, both entering the expansion zone [5] - The price indices for major raw materials and factory prices significantly increased to 63.9% and 55.4%, respectively, due to rising commodity prices and increased procurement activities [5] Group 3: Non-Manufacturing PMI Insights - The Non-Manufacturing Business Activity Index rose to 50.1%, showing an improvement in the non-manufacturing sector's economic conditions [7] - The service sector's business activity index reached 50.2%, with significant growth in sectors like rail transport and financial services, while retail and hospitality lagged behind [7] - The construction sector's business activity index improved to 49.3%, with a positive outlook for future activities as indicated by a business activity expectation index of 50.5% [7] Group 4: Comprehensive PMI Overview - The Comprehensive PMI Output Index increased to 50.5%, indicating an overall improvement in production and business activities across sectors [8] - The manufacturing production index and non-manufacturing business activity index contributed to this increase, standing at 51.4% and 50.1% respectively [8]

Core Viewpoint - The manufacturing PMI has marginally declined due to seasonal disruptions from the longest Spring Festival holiday in history, with input inflation being a key concern moving forward [1][2]. Manufacturing Sector - In February 2026, the manufacturing PMI stood at 49.0%, down 0.3 percentage points from the previous month, indicating a lower-than-average performance for this time of year due to the holiday disruption [2]. - The production index was notably affected, particularly impacting small and medium-sized enterprises, while high-tech manufacturing remains in the expansion zone [2]. - The consumer goods sector's PMI increased to 48.8%, up 0.5 percentage points from last month, driven by consumption policies [2]. Supply and Demand Index - The supply and demand index experienced a seasonal decline, with new export orders showing a significant drop, although domestic demand remains relatively stable when seasonal factors are excluded [3]. - Industries such as agricultural processing and computer communication equipment are expanding, while textiles and automotive sectors remain below the critical point [3]. - The purchasing price index for raw materials has slightly decreased, while factory prices remain stable, potentially improving revenue expectations for businesses [3]. Non-Manufacturing Sector - The service sector showed stable performance with a slight increase in the business activity index, although there is significant structural differentiation [3]. - Industries related to consumer travel, such as accommodation and dining, are experiencing rapid growth, while capital market services and real estate are operating at low levels [3]. - The construction sector's business activity index has marginally declined due to the holiday, with some projects temporarily halted [3]. Future Outlook - The macroeconomic policy is expected to be more proactive, with a focus on supporting overall demand [4]. - The Central Political Bureau has indicated a commitment to more active fiscal policies and moderately loose monetary policies, with potential for further interest rate cuts [4]. - There will be an emphasis on boosting consumption and expanding investment, including infrastructure projects like parking lots and charging stations [4].

Economic Overview - The manufacturing PMI for February 2026 decreased by 0.3 percentage points to 49%, indicating a contraction in the manufacturing sector[7] - Despite the decline, the actual performance is considered better than seasonal expectations due to the impact of the Spring Festival[7] - The construction sector's business activity index fell to 48.2%, down 0.6 percentage points, reflecting reduced activity during the holiday period[7] Supply and Demand Dynamics - The overall supply exceeds demand, with production and new orders PMI at 49.6% and 48.6% respectively, indicating no significant improvement in the supply-demand balance[7] - The gap between raw material purchase prices PMI and factory prices PMI is narrowing, but it remains uncertain if this indicates improved bargaining power for downstream enterprises[7] Sector Performance - High-tech manufacturing PMI recorded at 51.5%, remaining a key driver of economic growth, while consumer goods PMI rose to 48.8% but still below the expansion threshold[7] - Service sector activity index increased to 49.7%, with growth driven by hospitality and entertainment sectors during the Spring Festival[7] External Factors and Risks - Risks include slower-than-expected transmission of counter-cyclical policies, uncertainties in trade policies from other countries, and potential impacts of geopolitical conflicts on commodity prices[4]

Group 1: Manufacturing Sector - The manufacturing PMI for February is 49.0%, down 0.3 percentage points month-on-month, indicating continued weakness influenced by the Spring Festival effect[1] - The production PMI decreased by 1.0 percentage points to 49.6%, while new orders, new export orders, and import PMIs fell by 0.6, 2.8, and 1.7 percentage points to 48.6%, 45.0%, and 45.6% respectively[12] - Large enterprises showed improvement with a PMI increase of 1.2 percentage points, while medium and small enterprises saw declines of 1.2 and 2.6 percentage points respectively[20] Group 2: Non-Manufacturing Sector - The construction PMI fell by 0.6 percentage points to 48.2%, with new orders index slightly improving by 2.1 percentage points to 42.2%[25] - The service sector PMI increased to 49.7%, up 0.2 percentage points, but new orders remain weak[32] - The issuance progress of special bonds reached approximately 18.7%, better than 13.0% in the same period of 2025[25] Group 3: Economic Outlook - The resumption of work is slightly faster than in previous years, with a construction resumption rate of 8.9% as of February 25, 2026, an increase of 1.5 percentage points year-on-year[37] - Economic fundamentals in Q1 are expected to remain under pressure, necessitating stronger growth stabilization policies, including additional policy financial tools and accelerated fiscal spending[37] - Risks include unexpected policy changes and potential downturns in the U.S. economy affecting domestic exports[42]

Group 1: Manufacturing Purchasing Managers Index (PMI) - In February, the manufacturing PMI decreased to 49.0%, down by 0.3 percentage points from the previous month, indicating a decline in economic activity [2][3] - Both production index and new orders index fell to 49.6% and 48.6% respectively, showing a slowdown in production and market demand [3] - Large enterprises maintained expansion with a PMI of 51.5%, while small and medium-sized enterprises faced significant impacts from the Spring Festival, with PMIs of 47.5% and 44.8% respectively [3] Group 2: Non-Manufacturing Business Activity Index - The non-manufacturing business activity index rose slightly to 49.5%, an increase of 0.1 percentage points from the previous month, indicating an overall improvement in the non-manufacturing sector [6] - The service sector's business activity index increased to 49.7%, driven by growth in travel-related industries, with hospitality and entertainment sectors showing indices above 60.0% [6] - The construction sector's business activity index fell to 48.2%, reflecting a decline due to the Spring Festival, although the market expectation index for construction improved to 50.9% [6] Group 3: Comprehensive PMI Output Index - The comprehensive PMI output index decreased to 49.5%, down by 0.3 percentage points from the previous month, indicating a general slowdown in production and business activities [7] - The manufacturing production index and non-manufacturing business activity index were recorded at 49.6% and 49.5% respectively, contributing to the overall decline in the comprehensive PMI [7]

Group 1: PMI Overview - In February 2026, the Manufacturing Purchasing Managers' Index (PMI) was 49.0%, a decrease of 0.3 percentage points from the previous month[1] - The Construction Business Activity Index was 48.2%, down from 48.8%[1] - The Services Business Activity Index was 49.7%, slightly up from 49.5%[1] Group 2: Seasonal Factors and Trends - The decline in PMI is attributed to seasonal factors such as the Spring Festival, with both supply and demand showing temporary slowdowns[2] - The production index fell to 49.6% from 50.6%, and the new orders index dropped to 48.6% from 49.2%[3] - The operating rate decreased by 3.49 percentage points to 39.51%, while the electric furnace capacity utilization rate fell by 17.41 percentage points to 36.34%[3] Group 3: Price and Inventory Dynamics - The factory price index remained stable at 50.6%, while the purchasing price index decreased by 1.3 percentage points to 54.8%[4] - The gap between purchasing prices and factory prices narrowed to 4.2 percentage points, indicating some relief in cost pressures for enterprises[4] - Finished goods inventory index decreased by 2.8 percentage points to 45.8%, while raw materials inventory increased slightly by 0.1 percentage points to 47.5%[4] Group 4: Future Outlook - Manufacturing production activity is expected to recover in March as the effects of the Spring Festival dissipate, with production and new orders indices anticipated to rise[2] - External demand remains resilient, supported by OECD leading indicators pointing to a mild upward trend in exports through June[2] - Domestic demand relies on further policy support and improvements in terminal consumption and investment needs[2]

Core Viewpoint - The overall decline in February PMI is primarily influenced by seasonal factors such as the Spring Festival holiday, with both supply and demand experiencing a temporary slowdown. Production activities and order indicators have declined in tandem, but the extent of the decline is consistent with historical seasonal patterns. [2] Group 1: PMI and Economic Activity - The manufacturing PMI for February is reported at 49.0%, a decrease of 0.3 percentage points from the previous month. The construction business activity index is at 48.2% (previously 48.8%), and the service business activity index is at 49.7% (previously 49.5%) [1] - The production index for February is at 49.6% (previously 50.6%), and the new orders index is at 48.6% (previously 49.2%), indicating a decline in both supply and demand [3] - The operating rate has decreased due to the holiday impact, with the high-frequency data showing a drop in the rebar operating rate by 3.49 percentage points to 39.51%, and the electric furnace capacity utilization rate declining by 17.41 percentage points to 36.34% [3] Group 2: Price and Cost Dynamics - The factory price index remains unchanged at 50.6%, while the raw material purchase price has decreased by 1.3 percentage points to 54.8%, indicating a reduction in upstream cost pressures [4] - The gap between purchase prices and factory prices is currently 4.2 percentage points, suggesting that corporate profits are still under some cost pressure, although this gap has shown signs of narrowing [4] Group 3: Inventory Trends - The finished goods inventory index has decreased by 2.8 percentage points to 45.8%, while the raw material inventory has increased slightly by 0.1 percentage points to 47.5%. The purchasing index has declined by 0.5 percentage points to 48.2% [4] - Companies are adopting a cautious "production based on sales" strategy, leading to a relatively tight balance in overall inventory levels [4] Group 4: Future Outlook - As the effects of the Spring Festival gradually dissipate, manufacturing production activities are expected to recover in March, with both the production index and new orders index anticipated to rise [2] - External demand remains resilient, as indicated by the OECD composite leading indicators pointing towards a mild upward trend in exports year-on-year until June [2]