New orders expanded for the first time since July and grew at the quickest pace since May 2021. Surveyed firms also noted an improvement in foreign demand for Chinese manufactured goods, with new export orders expanding for the first time since July, providing some comfort for exporters amid slowing global economic growth.
Manufacturers pushed up charges for exported items due to higher input costs and improved demand.
The Caixin survey centres on small firms and coastal regions and includes a number of exporters. Although staffing levels in the sector rose for the first time in nearly a year, there were signs of increased pressure on operating capacity with the backlog of work up for the second straight month. Business confidence, however, continued to strengthen with overall optimism the highest since March 2021. "In a nutshell for February, the economy saw a faster pace of recovery following a peak in the recent wave of COVID infections as supply and demand expanded, overseas demand surged, employment started to rebound, and logistics recovered at a faster pace," Wang Zhe, senior economist at Caixin Insight Group, said in a note. "But the impact of the pandemic remains far-reaching. Currently, the foundation for economic recovery is not yet solid, and it will take time to fully restore production and social order to normal." The annual parliamentary meeting kicking off on March 5 is expected to announce China's 2023 economic growth target, a new economic team and policy strategy. Nomura analysts expect Beijing to maintain its pro-growth position to ensure a rebound but they do not expect a big stimulus package to be announced, as the new government may take a more conservative stance in its first year. (Reporting by Ellen Zhang and Ryan Woo; Editing by Sam Holmes)
