China’s factory activity expected to fall for 5th month on Feb.

China’s manufacturing activity is expected to decline for the fifth consecutive month in February, a Reuters poll showed on Thursday.

This could lead to increased calls for additional stimulus measures as factory owners struggle to secure orders both domestically and internationally.

The median forecast of 33 economists in the poll suggests that the official purchasing managers’ index (PMI) likely fell to 49.1 in February from January’s 49.2. A PMI reading below 50 indicates contraction.

Despite some positive signs in December’s trade data and record-high new bank loans in January, economists agree that the economy is still facing challenges.

The official PMI data will be released on Friday, along with the private Caixin factory survey, which is expected to show a slight decline in activity.

China’s post-COVID recovery has raised concerns about the sustainability of its economic model, prompting expectations for policy reforms.

Policymakers have pledged to implement further measures to support growth, but analysts warn that Beijing’s fiscal capacity is limited.

The People’s Bank of China (PBOC) recently cut the reserve requirement ratio for banks, releasing one trillion yuan in long-term liquidity to boost growth.

President Xi Jinping has emphasised the importance of supporting manufacturers through technology upgrades and reducing logistics costs to rebalance the economy and drive productivity gains.