The Chinese economy is steaming again, as evidenced by February macroeconomic data released this week.

The official NBS Manufacturing PMI — a broadly used indicator of economic activity in the manufacturing sector based on new orders, production levels and employment — increased to 52.6 in February of 2023 from 50.1 in January, ahead of market expectations of 50.5. A PMI reading above 50 suggests that the manufacturing sector is expanding, while a reading below 50 indicates it is contracting.

In addition, the official NBS Non-Manufacturing PMI — a measure of economic activity in the service sector — increased to 56.3 in February 2023 from 54.4 a month earlier, the second consecutive increase since the end of the COVID-19 lockdowns and the highest reading since March 2021.

Meanwhile, the Caixin China Manufacturing PMI — another measure of manufacturing activity in China compiled by HIS Markit and published by Caixin Media — increased to 51.6 in February 2023 from 49.2 in January, above market expectations of 50.2. This was the first increase in factory activity since last July and the highest reading in eight months, after the end of COVID-19 lockdowns.

The comeback of China's economy could be a game changer for the commodities market, as the world's second-largest economy is the largest consumer of commodities such as oil, gas, coal, metals and agricultural products.

Higher commodity prices could set the world economy into another supply-side shock and undermine the efforts of the world's central banks to reign inflation.

Still, the impact of China's economic revival on commodity prices could be mixed in the near term. For instance, the impact of higher demand on oil prices may be muted, as China has been buying oil from Russia at a deep discount and has, perhaps, enough inventories to cover its energy needs for several months.

"There is the possibility that China's increased economic activity could lead to higher fuel prices, but that risk has largely been mitigated as China has taken advantage of cheaper Russian oil," Kavan Choksi, an investor and business management and wealth consultant, told International Business Times.

But that may differ for other commodities like copper, which China buys at market world prices. Thus, the nearly 20% spike in copper prices seen since last August.

Samuel Gregg, a distinguished fellow in political economy and senior research faculty at the American Institute of Economic Research, thinks China's reentry into the global economy will have mixed implications for inflation, depending on individual countries' context and China's monetary policy forward.

"China's renewed demand for energy and raw materials is likely to increase the price of these commodities," he told IBT. "This will likely create more inflationary pressures in areas like the European Union where the price of energy is already high and where energy accounted for something like 40% of inflation in the eurozone at the end of 2022."

The situation is different for the U.S. "Energy prices are lower in America, so any upward pressure from China's reentry is likely to be less. At the end of 2022, energy accounted for only 18% of inflationary pressures in America," he explained.

Then there is China's monetary policy. "If China's Central Bank embarks on expansionary credit policies, then we will likely have significant boots in global productivity and commodity prices throughout the world," Gregg added. "That will make disinflation a slower process in many countries."

And there's China's fiscal policy. "A likely surge in spending in China by 1.4 billion consumers in the wake of the easing of lockdowns will add to inflationary pressures, especially if the world's central banks are starting to slow down their interest-rate increases," he said further.

Meanwhile, China's economic comeback could be a boon to the sectors benefiting from the end of the COVID-19 lockdowns, like restaurants and leisure activities.

Choksi sees China's reopening already driving an influx of investment in Chinese equities. Strong inflows in China-focused mutual funds and ETFs reflect the market's perception that China will experience a robust economic recovery.

"Much of China's economic growth would likely be driven by pent-up demand from the Chinese consumer," he told IBT. "While higher spending from the Chinese consumer will benefit Chinese equities, some of this increased demand may aid U.S. exporters to an extent. Travel booking sites, for instance, may continue to see strong sales from China."

The Chinese national flag is seen in Beijing, China