China manufacturing PMIs hold up better than expected in February

China's factories whirred back to life in February, boosted by strong demand for overseas, although some economists said the outlook was weaker.

Caixin's manufacturing sector purchasing managers' index for February rose from 51.0 in January to 51.7 for February.

The improvement was mimicked bythe 'official' manufacturing PMI, which improved from 51.3 to 51.6 (consensus: 51.2).

That was marginally below the four-year high of 51.9 reached in December but nevertheless better than the 50.8 consensus forecast.

"February’s PMI readings suggest that the recent pick-up in global demand is keeping China’s recovery mostly intact for now," said Julian Evans-Pritchard, China economist at Capital Economics.

Furthermore, indices for new export orders in both factory PMis hit multi-year highs in February, Evans-Pritchard pointed out.

However, Evans-Pritchard believed growth in China's major trading partners would settle at a lower level over the rest of the year, weighing on activity, alongside slower domestic demand growth in Asia's largest economy as a result of tighter monetary and fiscal policies from Beijing.

To take note of, price indices contained in Wednesday's PMIs all dropped, pointing to an easing of price pressures and reduced factory gate inflation.

The smaller improvement in total new orders pointed to a more muted upswing in domestic activity in China, Evans-Pritchard said.

Indeed, non-manufacturing activity also cooled in February, the results of a separate PMI also published on Wednesday revealed, falling back from a print of 54.6 to 54.2 on the back of weakness in construction and slower services growth.