This episode contains segments on:

• China’s February Purchasing Managers’ Index (PMI);
• January Inbound Foreign Direct Investment (FDI);
• German Chancellor Merz’s visit to China;

Listeners are also invited to join the European Chamber’s events to celebrate the International Women’s Day from 5th March to 7th March.

Contact:

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Read more:

China’s February Purchasing Manager’s Index

https://www.stats.gov.cn/sj/zxfb/202603/t20260304_1962699.html

China Inbound FDI January 2026

https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_e3ade82446a440e698ae1e89eeedafb8.html

German Chancellor Merz’s visit to China

https://www.gov.cn/yaowen/liebiao/202602/content_7059634.htm

European Chamber celebrates International Women’s Day

https://mp.weixin.qq.com/s/mS3EVS7CqpD0epsAtGVf-g?token=2013255733&lang=zh_CN

Transcript:

RUI: Hello and welcome to China ShortCuts,

XINHE: the European Chamber’s weekly catch-up on China’s business landscape.

RUI: This episode was recorded on 4th February 2026.

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XINHE: China’s Manufacturing Purchasing Manager’s Index, or PMI, dropped by 0.3 percentage points to 49 in February, indicating a contraction in the sector.

RUI: The decline was driven in part by slowing production activity, with the respective PMI falling by 1 percentage point to 49.6. Fewer incoming new orders also contributed to an overall contraction, with the PMI for new export orders in particular falling by 2.8 percentage points to 45.

The PMI for factory prices remained in expansion territory for a second consecutive month in over a year, hovering at 50.6 points. This is a positive sign that the government’s ongoing efforts to combat price deflation and address unsustainable competition may be having an impact.  

Larger enterprises fared significantly better in February, with their respective PMI increasing by 1.2 percentage points to 51.5, indicating expansion. By contrast, the PMIs for small and medium-sized enterprises fell by 2.6 and 1.2 percentage points to 44.8 and 47.5 respectively, both well into contraction territory.

(Music)

XINHE: The non-manufacturing PMI for February edged up slightly by 0.1 points to 49.5, yet remained in contraction territory.

RUI: This increase was mainly driven by the service sector, which saw its PMI rise by 0.2 points to 49.7. Businesses in this sector share a particularly positive outlook for market development over the coming months – the business activity expectation PMI, which tracks overall confidence, hovered at 55 points in February.

The construction sector contracted for a second consecutive month, with its respective PMI falling 0.6 percentage points to 48.2.

(Music)

XINHE: China saw 92 billion yuan in inbound foreign direct investment, or FDI, in January 2026, a 5.6 per cent decrease year-on-year.

RUI: While overall FDI has been falling, investment into high-tech sectors has been continuously increasing, up 0.6 per cent to 33.75 billion yuan. In January 2026, 36.7 per cent of investments flowed into high-tech sectors, an increase of 2.3 per cent over January 2025. By subsector, FDI into R&D and design services and computer and office equipment manufacturing surged, increasing 175.1 per cent and 82.4 per cent respectively.

In January, FDI from Germany and Switzerland registered year-on-year increases of 86.6 per cent and 57.4 per cent respectively. Investment from Germany in particular hit a four-year high in 2025 and continued strongly in early 2026.

(Music)

XINHE: German Chancellor Friedrich Merz visited China from 25th to 26th February.

RUI: Chancellor Merz met with Chinese President Xi Jinping on Wednesday, 25th February for a series of talks on a wide range of topics from climate policy to trade relations. Before the meeting, Merz had aired concerns about the unlevel playing field foreign companies face in China as well as China’s export controls on rare earth elements.

Merz described the talks with President Xi as positive. Both sides emphasised the importance of EU-China cooperation on the international stage and a need to safeguard fair standards in global trade.

(Music)

XINHE: Join the European Chamber this week in celebrating International Women’s Day on 5th March.

RUI: This year’s International Women’s Day will be celebrated with the theme “rights, justice, and action for all women and girls”. The European Chamber’s Beijing, Shanghai, Shenyang, Southwest China and Tianjin chapters will all be hosting Women’s Day events from 5th March to 7th March.

XINHE: More information can be found on the European Chamber’s website – just follow the link in the show notes.

(Music)

RUI: Thanks for listening, and don’t forget to tune in next week.