Retail sales increased 4% in January-February from the same period a year earlier, the National Bureau of Statistics said Monday, exceeding economist forecasts and accelerating from a 3.7% gain in December. But unemployment climbed from the end of last year. Industrial output rose 5.9%, higher than the median estimate in a Bloomberg survey of analysts. Growth in fixed-asset investment picked up to 4.1%.
The retail data is in a “nice and comfortable range,” said Helen Qiao, chief economist for greater China for Bank of America Global Research. “That probably implies that further policy stimulus is still warranted. At the same time, it is not too weak that people would worry before the policy kicks in.” So far, traders weren’t too impressed with the seemingly upbeat data. The onshore CSI 300 Index swung to a small loss while gains in the Hang Seng China Enterprises Index narrowed to 0.2% from 1.1% earlier.
Chinese 10-year bonds held losses, with the yield up four basis points to 1.87%, set for the highest in around a week. The offshore yuan pared gains, after the central bank kept its tight grip on the daily reference rate for the currency. The figures provide the most comprehensive snapshot yet of how the world’s second-biggest economy has fared since Trump embarked on a new trade war. China combines data for January and February to smooth out distortions caused by the irregular timing of the Lunar New Year holiday.
Lifting consumer spending is key to countering US policies that are upending global trade and causing a slowdown of Chinese exports, which contributed to nearly a third of the country’s economic expansion in 2024. The government unveiled a special action plan aimed at reviving consumption in the country over the weekend. It marks China’s latest effort to expand domestic demand, the government’s top economic task this year as it seeks to achieve an ambitious growth target of around 5%.
Investors await further clues from top officials during a press conference set to be held at 3 p.m. Monday on steps to boost consumption.
Gains in retail sales have continued to lag behind growth in industrial production, a divergence that was evident throughout last year. China’s factory activity returned to expansion in February, according to the official manufacturing purchasing managers’ index released earlier this month.
Even so, the consumer economy is stabilizing after a slowdown, as government subsidies coax consumers to buy new smart-phones, home goods and cars. Holiday makers also splurged during the week-long Chinese New Year break through early February.
