Staff sort packages on the mail sorting assembly line at the Postal Delivery Logistics Joint Distribution Center in Mengshan county, Wuzhou city, Guangxi province, China, on January 28, 2026. (Photo by Costfoto/NurPhoto via Getty Images)
Costofoto | Nurfoto | fake images
China’s economy started on a solid footing this year, with consumption and production exceeding expectations, while holiday spending and strong foreign demand provided an initial boost.
Retail sales during the first two months of the year rose 2.8% from a year earlier, beating economists’ forecasts for 2.5% growth but a notable slowdown from the 4% growth in the January-February 2025 period.
Industrial production increased by 6.3%, also exceeding expectations of a 5% increase in a Reuters poll. Industrial production has been a relative bright spot in the world’s second-largest economy, thanks to resilient external demand, particularly from European and Southeast Asian nations.
Investment in fixed assets, which includes property, continued to fall in the first two months, contracting 1.8% compared to the previous year, less than the forecast of a 2.1% fall. Investment in real estate development continued to decline as the housing crisis dragged on, falling 11.1% in January and February, moderating from the 17.2% drop in 2025.
Fixed asset investment saw an unprecedented decline in 2025, declining 3.8% year-on-year, as a deepening real estate crisis and tighter restrictions on local government borrowing hampered one of China’s traditional growth engines.
Chinese leaders unveiled their annual economic targets for 2026 just last week, lowering the GDP growth target to a range of 4.5% to 5%, the least ambitious target on record since the early 1990s.
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