China’s economy starts 2026 strongly as retail sales, investment rise
Before the Iran energy crisis and latest round of China-US trade talks, retail spending grew 2.8 per cent while fixed-asset investment increased 1.8 per cent
China’s economy got off to a strong start in 2026, as several indicators registered expectation-beating expansions in the first two months – though analysts cautioned the imminent energy crisis caused by the US-Israel war in Iran would present challenges for Beijing and the world at large in the months to come.
China’s industrial output rose 6.3 per cent in January and February compared with the same period last year, according to data released by the National Bureau of Statistics (NBS) on Monday. The reading beat market expectations for a 5.23 per cent uptick based on a poll of economists conducted by financial data provider Wind.
Retail sales grew by 2.8 per cent year on year in the first two months – up from a 0.9 per cent increase in December – thanks to a surge in spending during the extended Chinese New Year break. Wind had predicted a 2.37 per cent rise.
Results for the first two months are often combined in China to minimise distortions from the long public holiday, which fell in February this year but took place in January last year.
The strong spending data presents a tailwind for Beijing’s drive to stimulate consumption, with officials pledging to make domestic demand a “strategic anchor” for the economy this year during the just-concluded “two sessions” – the annual meetings of China’s top legislature and political advisory body.