Between January and February, China's industrial production surpassed expectations, experiencing notable growth. However, there was a softening in retail sales growth and property investment saw a significant decline. These trends indicate a potential need for further policy stimulus as the Chinese government aims to achieve a growth rate of approximately 5 percent.
Industrial output during this period rose by 7.0 percent, an acceleration from December's increase of 6.8 percent, as reported by the National Bureau of Statistics. Predictions had put this growth rate at a more modest 5.0 percent. Retail sales saw an increase of 5.5 percent over the same period, compared to the previous year. While lower than the 7.4 percent growth observed in December, this figure exceeded economists’ predictions of a 5.2 percent rise.
During the first two months of the year, fixed asset investment expanded by 4.2 percent compared to the previous year, surpassing economic forecasts of a 3.2 percent increase. Property investment, however, fell by 9.0 percent; a less severe decline than the 24 percent decrease recorded in December.
The unemployment rate increased slightly, rising to 5.3 percent from 5.1 percent in December. The National Bureau of Statistics typically combines January and February economic data to account for Lunar New Year-induced fluctuations.
Economists at Capital Economics are anticipating a continuation of this recovery in the coming months, thanks to the increase in policy support provided by the Chinese government. However, they warn that this recovery might be short-lived and that achieving the government's growth target of approximately 5.0 percent presents challenges.
