Economic growth is stabilising in China. Weaker activity in the manufacturing sector is partly offset by resilience in services. In the first two months of the year, industrial production softened further and fixed-asset investment growth recovered slightly, while growth in nominal retail sales remained robust. This mixed picture was confirmed by the manufacturing and services PMis in the first quarter, with services holding up better. At the same time, trade activity has been very volatile in recent months, partly reflecting distortions related to the Lunar New Year. Following weak data for February, the authorities expect some rebound in March. Annual headline CPI inflation eased to 1.5% in February due to the sharp decline in food price contribution Inflation excluding food and energy also slowed to 1.8%. At the same time annual producer price inflation remained steady at 0. 1% in February, as lower oil prices were offset by a price increase in the mining and quarrying sector ECB Economic Bulletin, Issue 3/2019- Update on economic and monetary developmentsECB Economic Bulletin, Issue 3 / 2019 – Update on economic and monetary developments External environment 8 Economic growth is stabilising in China. Weaker activity in the manufacturing sector is partly offset by resilience in services. In the first two months of the year, industrial production softened further and fixed-asset investment growth recovered slightly, while growth in nominal retail sales remained robust. This mixed picture was confirmed by the manufacturing and services PMIs in the first quarter, with services holding up better. At the same time, trade activity has been very volatile in recent months, partly reflecting distortions related to the Lunar New Year. Following weak data for February, the authorities expect some rebound in March. Annual headline CPI inflation eased to 1.5% in February due to the sharp decline in food price contribution. Inflation excluding food and energy also slowed to 1.8%. At the same time, annual producer price inflation remained steady at 0.1% in February, as lower oil prices were offset by a price increase in the mining and quarrying sector