China's manufacturing activity contracted further in February, with the official PMI dropping to 49.0 from 49.3 in January. The reading missed market expectations of 49.2 and remained below the critical 50-point threshold that separates expansion from contraction. This marks the second consecutive month of manufacturing contraction, highlighting persistent challenges in the world's second-largest economy.

While the non-manufacturing PMI showed a marginal improvement to 49.5 from 49.4, it still fell short of forecasts at 49.7. The composite PMI, which combines manufacturing and services data, eased to 49.5 from 49.8 in January. These figures point to continued weakness in domestic demand and underscore the uneven nature of China's economic recovery.

The latest data comes amid sluggish external demand and an ongoing property market downturn that continues to weigh on business sentiment. Investors are closely monitoring Beijing's annual policy meeting for potential additional fiscal and monetary stimulus measures. The persistent contraction in factory activity raises questions about the effectiveness of current policy support and the trajectory of China's economic growth