China’s economy got off to a stronger-than-expected start in the first two months of the year. Industrial production grew 5.9% yoy, beating market expectations of 5.3% yoy. Retail sales also exceeded forecasts, rising 4.0% yoy compared to an expected 3.8% yoy, reflecting improving consumer demand.
Meanwhile, fixed asset investment increased by 4.1% yoy, surpassing projections of 3.2% yoy, but ongoing weaknesses in the real estate sector persisted, with property investment falling -9.8% yoy. Additionally, private investment remained flat, signaling that confidence among smaller businesses and private enterprises was subdued.
China’s National Bureau of Statistics noted that existing and new policies aimed at stimulating growth have begun to take effect, leading to steady expansion in the industrial and services sectors, improved investment, and stable employment conditions. Officials highlighted “new quality productive forces” as key drivers of momentum.
To further bolster domestic demand, China’s State Council unveiled a “special action plan” over the weekend, aiming to increase household incomes, introduce childcare subsidies, and reduce financial burdens to encourage consumption.
While the plan was widely circulated across local governments, it lacked concrete details on financial support for implementation, leaving uncertainties about its immediate impact.
