China opened 2026 with a stronger-than-expected start: production gains accelerated, trade surged and consumption crept higher, even as the property slump continued to weigh on investment. The National Bureau of Statistics portrayed January–February data as evidence that supply and demand were both improving, employment broadly stable and new productive forces—notably high‑tech manufacturing—gaining scale.
Industrial production picked up notably in the first two months. Value added at industrial enterprises above the designated size rose 6.3% year‑on‑year, with manufacturing up 6.6%. Equipment manufacturing grew 9.3% and high‑technology manufacturing jumped 13.1%, led by strong output in 3D‑printing machines, lithium‑ion batteries and industrial robots.
The services sector also contributed to growth. The services production index rose 5.2%, with information technology, leasing and business services, finance and transport recording double‑digit or high single‑digit gains. While the services business activity index sits just below the 50 boom/decline threshold, firms’ forward‑looking activity expectations were decidedly more upbeat.
Consumption showed a tentative recovery. Retail sales climbed 2.8% year‑on‑year, helped by stronger sales of basic goods and upgraded categories; online sales grew 9.2% and now account for nearly a quarter of total retail. Services retail expanded faster than goods retail, reflecting a post‑pandemic rebound in travel, dining and leisure spending.
Fixed‑asset investment moved from contraction toward growth but remained uneven. Total investment rose 1.8% year‑on‑year, and excluding real estate the increase was 5.2%. Infrastructure investment surged 11.4%, while property development spending fell 11.1% amid weaker sales—new home transactions were sharply lower both by area and value, underscoring the sector’s continued drag on activity.
External demand proved a major tailwind. Goods trade surged by 18.3% year‑on‑year, with exports up 19.2% and imports up 17.1%. Exports of machinery and electrical products climbed strongly, and trade with Belt and Road partner countries expanded by 20%. Private firms outperformed foreign‑funded companies in export growth.
Price and labour indicators painted a mixed picture. Consumer prices rose just 0.8% year‑on‑year for the two‑month period, with core inflation about 1.3%, while producer prices were still in contraction (PPI down 1.2%). The official urban surveyed unemployment rate held at 5.3%, and average weekly hours for employees remained high at 48.1.
The bureau struck an upbeat tone while listing clear risks. Authorities highlighted accelerating supply and stabilising demand but warned that global geopolitical tensions and long‑standing domestic structural problems continue to pose upside and downside risks. The policy prescription promises active, targeted macro measures to stabilise employment and firms, accelerate new productive forces and press on with the shift to higher‑quality growth.
Taken together, the data show a China still grappling with a painful post‑real‑estate adjustment but increasingly propped up by exports, high‑tech manufacturing and infrastructure. For foreign observers and markets, the balance of resilient external demand and structural domestic weakness will shape Beijing’s policy choices in the months ahead.