Chinese manufacturing PMI data shows decline continues

Two readings of China's manufacturing performance showed the industry's decline rumbled on for another month in February.

The Caixin Purchasing Managers Index (PMI) fell to 49.0 from 49.4 the month before and below the consensus market forecast for the number to remain at 49.4.

Official manufacturing PMI from China's National Bureau of Statistics also disappointed, falling to 49.0 versus 49.4 the month before and forecasts for the same.

The NBS non-manufacturing number also showed a slowdown, coming in at 52.7, down from 53.5, which economists said helped explain Monday's decision by the central bank to cut the required reserve ratio.

"Today's PMIs suggest the economy lost some momentum last month but monetary policy easing by the People's Bank helps to limit the downside risks going forward," said Julian Evans-Pritchard of Capital Economics.

Delving in to the data, he said the breakdown of the PMI elements suggested that softer domestic demand was to blame, partly due to seasonal effects.

"On a separate note, the price components of the manufacturing PMIs continued to rise last month, consistent with our view that inflationary pressures are growing and that concerns over deflation are overdone," he added.