China's Industrial Production and Retail Sales Growth Exceed Expectations in January-February

Investing.com - In the first two months of 2026, China’s industrial production and retail sales growth exceeded expectations. The domestic manufacturing sector remains optimistic, while local consumer demand was boosted by the Spring Festival holiday.

Government data shows that industrial production increased by 6.3% year-on-year from January to February. This figure surpasses the expected 5.3% and is a significant rebound from the previous month’s 5.2%.

Retail sales grew by 2.8%, exceeding the 2.6% forecast, mainly due to excess consumer spending during the Spring Festival holiday in early February.

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China’s fixed asset investment — a key indicator of capital expenditure — also improved in early 2026, growing by 1.8% from January to February, compared to an expected decline of 5.0%.

Fixed asset investment has seen its first increase since August 2025, indicating that corporate spending has improved as Beijing continues to increase fiscal support.

However, China’s unemployment rate unexpectedly rose from 5.1% in the previous month to 5.3% in January-February.

Data released on Monday shows that China’s actual manufacturing activity — a key driver of economic growth — remains strong, especially given the robust demand for Chinese exports.

The data also indicates an improvement in consumer spending, though whether this upward trend can be sustained beyond holiday-driven consumption remains to be seen.

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