THE index measuring Chinese manufacturing activity slid for the third consecutive month in February, reflecting the combined effects of tightening policies, rising production costs and seasonal changes.

Some economists, however, welcomed the fall, deeming it good for checking inflation and revamping the economy.

The official Purchasing Managers' Index, a comprehensive gauge of industrial activity across the country, lost 0.7 percentage points from January to 52.2 percent in February, the China Federation of Logistics and Purchasing said yesterday.

It was the third fall following January's 52.9 percent, December's 53.9 percent and November's 55.2 percent.

"The fall in headline PMI should be primarily ascribed to the week-long Chinese Lunar New Year holiday," said Wang Qing, a Morgan Stanley economist. "The holiday disrupted industrial activities in February."

Industrial production not only comes to a halt during the holiday, but is also significantly weakened in the week before and after, he said.

Li Maoyu, a Changjiang Securities Co analyst, said China's tightening measures to tame inflation also made it difficult for manufacturers to get credit and bolster production, and that also helped drag down the index.

"China's tougher monetary policy stance has checked, and will continue to check, growth of industrial activity," Li said. "It is good for the overall economy, keeping it from overheating and accelerating the pace of reform."

China raised the reserve requirement ratio last month to a record 19.5 percent for big banks, the second such move in a month and 10 days after an interest rate increase.

Market watchers say policymakers might lift the interest rate at least twice this year to curb runaway prices.

The contraction of manufacturing activity was also mirrored in the HSBC China Manufacturing Purchasing Managers' Index, which fell to a seven-month low of 51.7 in February from January's 54.5.

While the official PMI is heavily weighted toward big domestic companies, the HSBC survey is slanted more toward privately-owned and export-oriented firms.

"The final HSBC PMI reading confirms that the growth of China's manufacturing sector is cooling a little," said Qu Hongbin, an HSBC economist.

"This is a positive development as slower growth is helpful to check inflation, while concerns about a slump in growth are unwarranted."