Official China PMI surprises to the downside in February
The weak prints on two closely-followed surveys of activity in China's economy for February likely overstate the extent of the slowdown seen during the month of February, economists said, possibly as a result of the Lunar New Year holidays.
But equally so, economists were clear that they did expect to see slower growth in 2018, although they were divided when it came to the magnitude of the coming slowdown.
China's 'official' manufacturing sector purchasing managers' index fell from a reading of 51.3 for January to 50.3 in February (consensus: 51.1) - a 19-month low - amid declines in subindices tracking output, new orders and imports.
Commenting on the data, Julian Evans-Pritchard at Capital Economics said weakness in China's factory sector might partially reverse in the next two months as the disruptions from China's anti-pollution campaign faded.
However, he cautioned that: "any rebound is likely to prove short-lived and we still expect growth to be weaker than generally anticipated this year, with many underestimating the headwinds to the economy from slower credit growth and a cooling property sector."
Similarly, analysts at Danske Bank said they were expecting to see a "gradually declining" trend in China's manufacturing PMI over the course of 2018.
On a more positive note, they pointed to metals prices, which they used as a real-time indicator of activity in China, and which had not warned of a sharp slowdown.
"With China consuming 50% of global metals, a sharp change in the trend should have shown up in commodity demand and thus prices," they explained, adding that they were expecting to see "some" recovery in the index come March.
Given the surprisingly weak readings, economists at both Capital Economics and Danske Bank indicated they were keen to see Caixin's private sector-compiled factory PMI which was scheduled for release on the next day.