*

Official manufacturing PMI at 50.2 in February, best since

November

*

Non-manufacturing growth in February quickens to 50.4

*

Readings point to improving domestic demand

(Recasts, adds analyst comment in paragraphs 9-10, context

throughout)

By Joe Cash

BEIJING, March 1 (Reuters) - China's manufacturing

activity expanded at the fastest pace in three months in

February as new orders and higher purchase volumes led to a

solid rise in production, an official factory survey showed on

Saturday.

The reading should reassure officials that fresh stimulus

measures launched late last year are helping shore up a patchy

recovery in the world's second-largest economy, ahead of China

holding its annual parliamentary meeting starting on March 5.

Whether the upturn can be sustained remains to be seen amid

a trade war that was kicked off by U.S. President Donald Trump's

first salvo of punitive tariffs.

The official purchasing managers' index (PMI) rose to 50.2

in February from 49.1 a month prior, the highest since November

and beating analysts' forecasts in a Reuters poll of 49.9.

The non-manufacturing PMI, which includes services and

construction, rose to 50.4 from 50.2 in January.

Chinese policymakers are expected to announce economic

targets and fresh policy support next week at the high-profile

gathering in Beijing, which investors will also watch for signs

of further support for the struggling property sector and

indebted local developers.

China's $18 trillion economy hit the government's growth

target of "around 5%" in 2024, though in an uneven manner, with

exports and industrial output far outpacing retail sales while

unemployment remained stubbornly high.

Beijing is expected to maintain the same growth target this

year, but analysts are uncertain over how quickly policymakers

can revive sluggish demand, especially given the intensifying

trade tensions with the U.S.

"Since the PMI data is measured on a month-on-month basis,

it may be affected by seasonal factors related to the Spring

Festival in January and February," said Zhang Zhiwei, chief

economist at Pinpoint Asset Management.

"The manufacturing data is relatively stable," he added,

with the caveat that a more accurate assessment would only be

possible after the release of further data. China will release

trade data for January-February on March 7.

New export orders, factory gate prices, employment all

remained in negative territory last month, the National Bureau

of Statistics data showed, but contracted more slowly.

Employment still hit a 22-month high.

TACKLING EXTERNAL SHOCKS

To sustain growth and counter rising external pressures,

policymakers have pledged higher fiscal spending, increased debt

issuance and further monetary easing.

Top Chinese Communist Party officials met on Friday and

vowed to take steps to prevent and resolve any external shocks

to China's economy, state media reported.

The Politburo meeting came a day after Trump said he would

slap an extra 10% duty on Chinese goods on March 4, on top of

the 10% tariff that he levied on February 4 over the fentanyl

opioid crisis, to push Beijing to do more to stop the

trafficking of the deadly drug.

That would result in a cumulative 20% tariff, which is still

lower than the 60% he threatened on the campaign trail.

China's commerce ministry said on Friday it hoped to return

to negotiations with the United States as soon as possible,

warning that failure to do so could trigger retaliation.

Analysts polled by Reuters estimated the private sector

Caixin PMI rose 50.3, from 50.1 in January. The data will be

released on March 3.

(Reporting by Joe Cash; Editing by Muralikumar Anantharaman)