China’s factory output and consumption beat forecasts, while property investment contraction slows
Staff sort packages on the mail sorting assembly line at the Postal Delivery Logistics Joint Distribution Center in Mengshan County, Wuzhou City, China’s Guangxi Province, on January 28, 2026. (Photo: Costfoto/NurPhoto via Getty Images)
Cost photo | Nurfoto | Getty Images
China’s economy is off to a strong start this year; Both consumption and production exceeded expectations, as holiday spending and strong foreign demand provided an early increase.
In the first two months of the year, retail sales increased by 2.8% compared to the previous year, exceeding economists’ forecast for 2.5% growth. 4% growth In the January-February period of 2025.
Industrial production increased by 6.3 percent A 5% increase is expected in a Reuters poll. Industrial production has been a relative bright spot in the world’s second-largest economy, thanks in particular to resilient foreign demand from European and Southeast Asian countries.
Fixed asset investments, including real estate, rose 1.8% from the previous year, compared with forecasts for a 2.1% decline. Due to the real estate crisis, real estate development investments decreased further; It fell 11.1% in January and February. 17.2% decrease in 2025.
Fixed asset investment suffered an unprecedented decline in 2025, falling 3.8% year-on-year as a deepening crisis in the real estate sector and tight curbs on local government borrowing hindered one of China’s traditional growth drivers.
Just last week, the Chinese leadership announced its annual economic targets for 2026, lowering its GDP growth target to a range of 4.5% to 5%; this was the least ambitious goal dating back to the early 1990s.
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