Chinese manufacturing seen expanding in February

Workers in a garment factory in China China's manufacturing and export sector have been key contributors to its economic growth

China's manufacturing expanded and a key measure of its exports rose in February, a survey suggests, easing concern about an economic slowdown.

China's Purchasing Manager's Index, an indicator of manufacturing activity, rose to 51.0 from 50.5 in January.

The new export orders sub-index rose to 51.1 from 46.9. A reading above 50 indicates expansion.

There have been fears that a slow recovery in the US and the eurozone debt crisis may hurt China's growth.

"The February Purchasing Manager's Index (PMI) continued to pick up, further confirming a trend that the economy is stabilising," said Zhang Liqun, a researcher with the Development Research Centre of the State Council.

A separate survey by HSBC also showed that manufacturing activity may have bottomed out, though perhaps not expanding yet. The HSBC PMI increased to 49.6 in February from 48.8 in the previous month, indicating a much slower rate of contraction.

Stable environment

The latest data comes amid indications that the global economic environment may be stabilising.

Start Quote

It is clear that there has been a stabilisation of China's industry as well as the external environment”

End Quote Alistar Thornton IHS Global

Last week, eurozone leaders approved a fresh bail out package for Greece worth more than 130bn euro (£110bn; $170bn), easing fears of a Greek default.

On Wednesday, bank stocks in Europe rallied after a further 500bn euros in three-year loans were provided to struggling lenders by the European Central Bank.

Meanwhile in the US, also on Wednesday, Ben Bernanke, the chairman of the Federal Reserve central bank, told Congress that the US economy is continuing to recover.

And US growth for the fourth quarter was revised up from 2.8% to 3%.

The news has been encouraging, especially for China, which relies heavily on demand for its exports from the US and eurozone to support its growth.

"It is clear that there has been a stabilisation of China's industry as well as the external environment," Alistar Thornton of IHS Global in Beijing told the BBC.

Last month, China cut the amount of money banks must keep in reserve, in an effort to boost lending, a move that Mr Thornton said had contributed to the health of the manufacturing sector towards the end of the month.

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