Data published by the National Bureau of Statistics (NBS) showed that in February the composite PMI, which includes both manufacturing and non-manufacturing activity, rose to 56.4 from 52.9 in January. As a result, the index reached a record high, helped by the lifting of coronavirus restrictions in the country. Economists had expected the index to rise only to 53.7.
Meanwhile, business activity in the manufacturing sector also increased significantly - the manufacturing PMI was 52.6 points (the highest value since April 2012) compared with 50.1 points in January. The non-Manufacturing PMI rose to 56.3 points from 54.4 points in January, reaching the highest value since March 2021. Consensus estimates suggested that the manufacturing PMI would rise to 50.5 points, and the non-manufacturing PMI would reach 55.0 points. However, despite the significant improvement in February, economists warn that high PMI readings partly reflect the economy's weak starting point coming into this year and are likely to drop back before long as the pace of the recovery slows.
According to IMF forecasts, China's GDP will grow by 5.2% this year amid the lifting of coronavirus restrictions, but will slow down to 4.5% in 2023.
At the same time, Moody's economists expect China's economy to expand by 5% this year, which is 1% more than the previous forecast. The forecast for 2024 was also revised upward - to 5% from 4%. “We expect pent-up demand for non-traded services to support a consumption rebound starting this spring,” Moody's said, but warned that economic growth is likely to slow in the medium term.