The purchasing managers' index (PMI) for China's manufacturing sector came in at 50.2 in February, up from 50.1 in January, data from the National Bureau of Statistics (NBS) showed 1 March.
A reading above 50 indicates expansion, while a reading below reflects contraction.
"With rising demand and sound market expectations, business performance improved in February," said NBS senior statistician Zhao Qinghe.
"The PMI data came in better than expected, indicating that the policies to stabilize growth are paying off and demand is showing signs of expansion," said Wen Bin, the chief analyst at China Minsheng Bank.
Last month, the sub-index measuring purchase prices of major raw materials rose 3.6 percentage points to 60. The sub-index for prices at the factory gate was 54.1, up 3.2 percentage points from January.
The sub-index for production reached 50.4, down 0.5 percentage points from a month ago but has remained in the expansion area for four consecutive months.
The new order sub-index rose 1.4 percentage points to 50.7, pointing to rising demand in the manufacturing market.
Manufacturing companies' confidence was on the rise, with the sub-index for production and operation activity expectations at 58.7, up 1.2 percentage points from January.
The PMI for high-tech manufacturing and equipment manufacturing were 53.1 and 51.4, respectively, 1.2 and 1.1 percentage points higher than the previous month. The two indices have been in the expansion range since March 2020, indicating that new growth drivers are continuing to gain momentum.
Despite an improvement in the performance of the manufacturing industry, there still are problems restraining the sector, such as high costs of labour and raw materials as well as lack of funds, Zhao said.
The country still needs to "push forward the implementation of policies to help manufacturing enterprises ease difficulties, and to buoy their steady growth," he said.
Tuesday's data also showed that the PMI for China's non-manufacturing sector came in at 51.6 in February, up from 51.1 in January.
Chinese authorities have underscored "triple pressure" on the economy currently -- shrinking demand, supply shocks and weakening expectations.
The tone-setting Central Economic Work Conference held in December last year stressed "stability" as the top priority for the nation's economic policies in 2022.
The European Commission recently imposed increased duties on certain fasteners imported from China into Europe.
Reporting by ChinaFastener.com, additional commentary from Torque Magazine.
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