China's factory activity shrinks for 2nd month in a row
China's factory activity shrank for the second month in a row this February, with the official PMI dropping to 49 (anything below 50 means things are slowing down).
Even though exports held steady, weak demand at home is dragging things down.
The official reading was slightly below the median forecast of 49.1.
Non-manufacturing PMI barely budged
China's non-manufacturing (think: services and construction) PMI barely budged, rising just a bit to 49.5 after the big Lunar New Year break.
Both manufacturing and services are showing signs of stress—when these numbers stay under 50, it signals the economy isn't growing.
What are China's leaders saying?
With factories slowing and services under pressure, China's leaders say they'll focus on jobs and boosting demand.
Premier Li Qiang will reveal new growth targets on March 5, and officials have so far refrained from fresh stimulus, though the Politburo pledged more proactive and effective economic policies and analysts expect possible targeted measures when the government work report is presented.
The takeaway? China needs stronger domestic spending if it wants to keep its economy moving forward.