China’s industrial sector expanded in the first two months of 2026, with value added for enterprises above the designated size rising 6.3% year‑on‑year in real terms, the National Bureau of Statistics reported. On a monthly basis, output in February climbed 0.83% from January, signalling continued momentum as the country moves beyond pandemic-era disruptions and into a phase of incremental recovery.
The headline number masks a mixed internal picture. By major sector, manufacturing led growth at 6.6%, mining rose 6.1% and utilities (power, heat, gas and water) were up 4.7%. Ownership breakdowns show the private sector expanding fastest: private enterprises’ value added increased 7.4%, joint‑stock firms rose 6.9%, state‑controlled firms grew 4.2% and foreign or Hong Kong, Macao and Taiwan‑invested companies increased 4.0%.
The composition of growth points to an ongoing industrial upgrade. Of 41 large industries tracked, 35 recorded year‑on‑year gains. High‑tech and capital‑goods producers were among the strongest performers: computer, communications and other electronic equipment manufacturing surged 14.2%, manufacturers of railway, ship, aerospace and other transport equipment jumped 13.7%, and both general and special equipment manufacturing rose roughly 9%.
Not all segments performed well. Passenger vehicle production fell 9.9% to about 4.02 million units in January–February, and new energy vehicle (NEV) output declined 13.7% to roughly 1.60 million units, suggesting inventory correction, shifting subsidy dynamics or softer consumer demand. Steel production edged down 1.1% while cement output climbed 6.8%. Power generation increased 4.1% and crude oil processing grew 2.9%.
Demand and external exposure show moderate resilience. The product sales rate for large industrial enterprises was 95.4%, a small dip from a year earlier, implying slightly looser demand or higher inventories in parts of the sector. Export delivery value for industrial firms above the designated size amounted to 2.405 trillion yuan in nominal terms, a year‑on‑year increase of 6.3%, underscoring persistent foreign demand even as global growth softens.
Taken together, the numbers sketch an economy that is narrowing its growth profile toward higher‑value, tech‑intensive manufacturing while still carrying legacies of overcapacity in some heavy and consumer‑durable sectors. For policymakers the twin priorities are clear: sustain demand for consumer goods such as autos and support the scaling of advanced manufacturing through finance, procurement and skills policies.
Watchlists for the coming months include auto sales and NEV production trends, inventory and price movements in steel and cement, and whether export growth can be sustained as global conditions moderate. The January–February reading offers a snapshot of an industrial sector that is growing, structurally shifting, but not yet free of cyclical and policy risks.