Robots work at an intelligent plant of truck manufacturer First Automotive Works Jiefang Co., Ltd. (FAW Jiefang) in Changchun, northeast China’s Jilin Province, June 27, 2023. (Xinhua/Xu Chang)
China’s national economy got off to a steady start for the year with new and positive development momentum. In January and February, industrial output, retail sales and fixed-asset investment all grew at a faster pace than a year earlier, official data released on Monday showed.
The total value added of industrial enterprises above the designated size grew by 5.9 percent year-on-year, 0.1 percentage points faster than the full-year growth rate in 2024, according to the National Bureau of Statistics (NBS).
The services sector witnessed a good momentum of growth and modern services grew rapidly. The Index of Services Production grew by 5.6 percent year-on-year, 0.4 percentage points faster than the full-year growth rate in 2024.
National retail sales reached 8.37 trillion yuan ($1.16 trillion) in the first two months, up by 4 percent year-on-year, 0.5 percentage points higher than that of 2024. The effect of consumer goods trade-ins continued to emerge, with retail sales by enterprises above the designated size increasing by 26.2 percent for communication equipment, 21.8 percent for cultural and office supplies, 11.7 percent for furniture, and 10.9 percent for household appliances and audio-visual equipment.
NBS data further showed that fixed-asset investment in the period reached 5.26 trillion yuan, up 4.1 percent from a year earlier, and 0.9 percentage points higher than the full-year growth rate in 2024.
The data beat consensus estimates on a broad base, driven by policy front-loading in industrial production, infrastructure capex and consumption goods trade-ins, Morgan Stanley analysts wrote in a note sent to the Global Times on Monday.
“Fixed-asset investment saw the largest beat, with a large uptick in housing investment as we expected, but manufacturing and infrastructure investment also came in stronger than we expected on policy support. The beat in industrial production also defied softer-than-expected (yet still decent) exports somewhat amid possible front-loading,” they said.
Since the start of the year, the macro policy mix has delivered tangible results, reform and opening-up have deepened across the board, and social expectations and confidence have improved – all of which have laid a solid foundation for achieving the annual economic growth target of about 5 percent, Fu Linghui, an NBS spokesperson, said at a press conference on Monday.
As a highlight, the services sector has maintained its recovery momentum. It is particularly important, as services play a key role in absorbing new workforce entrants, Tian Yun, a veteran economist, told the Global Times on Monday.
Given the current pace of recovery in consumption and investment, achieving about 5 percent growth this year is well within reach, Tian said.
On Sunday, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued an action plan to vigorously boost consumption, stimulate domestic demand across the board, and increase households’ spending power by increasing their earnings and reducing financial burdens.
Following the recently concluded two sessions, policy implementation is accelerating. Improved policy timing, intensity and effectiveness are expected to boost domestic demand while helping to offset external uncertainties such as tariff hikes by the US, Wen Bin, chief economist at China Minsheng Bank, told the Global Times on Monday.
“However, we should be aware that the external environment is increasingly complex and severe, domestic effective demand is weak, some enterprises face difficulties in production and operation, and the foundation for sustained economic recovery and growth is not strong enough,” Fu noted.
In the first two months, total merchandise trade was 6.54 trillion yuan, down by 1.2 percent year-on-year. Specifically, the value of exports was 3.88 trillion yuan, up by 3.4 percent, and the value of imports was 2.66 billion yuan, down by 7.3 percent.
Exports continued to grow, with strong momentum in key categories such as mechanical and electrical products. This underscores the strong international competitiveness of Chinese goods and the resilience of the country’s foreign trade amid a challenging global environment, Fu noted.
Still, China must remain prepared for potential challenges in foreign trade this year, Tian said, adding that more efforts are expected to ensure stability in the real estate and stock markets as these sectors play a crucial role in supporting the recovery of consumption and are also key to attracting foreign capital inflows.
Fu said there are many favorable conditions for the economy to maintain steady and healthy development in 2025.
With a massive market, a comprehensive industrial system and abundant human capital, China holds clear advantages. There is significant room for demand upgrades, structural optimization and growth momentum shifts. As existing and new policy measures continue to take effect, the economy is expected to maintain overall stability and achieve steady progress in the first quarter, Fu said.
