China's shares closed flat amid ongoing trade tensions with the US, overshadowing earlier gains that buoyed on the back of the manufacturing sector's rebound.

The Shanghai Composite Index, the main gauge of Chinese stocks, marginally slipped to 3,316.93. The Shenzhen Component Index, on the other hand, rose 0.4%, or 38.35 points, to 10,649.59.

Sentiment soured as Beijing is looking at imposing new levies on American agricultural exports, which is a retaliation of the additional 10% tariff President Donald Trump is planning on Chinese goods, Reuters reported.

The news overshadowed the manufacturing activity's rebound to expansionary territory in both official and private readings. Data from the National Bureau of Statistics showed that the manufacturing purchasing manager's index expanded to 50.2 in February from a contraction of 49.1 in January. The Caixin Purchasing Managers' Index also rose to 50.8 points from the previous month's 50.1 points.

In corporate news, Shanghai Mobitech Technology (SHE:301173) soared 149% at the close of its trading debut, with its shares tripling to 70.59 yuan per share from its initial offering price of 28.33 yuan apiece.

Meanwhile, Aishida (SHE:002403) dropped 3.3% at the closed amid plans to continue renting properties in the Shanghai Gutai Riverside Building.

ZTE's (SHE:000063, HKG:0763) Shenzhen stocks dropped 6.5% after that attributable profit fell 9.7% to 8.42 billion yuan in 2024 from 9.33 billion yuan a year earlier.