China’s economic activity showed a stronger-than-expected start to 2026, with key indicators rebounding in the January–February period. Industrial production rose 6.3% yoy, well above market expectations of 5.1%. Retail sales increased 2.8% yoy, also beating forecasts of 2.5%.
Investment also surprised to the upside. Fixed-asset investment rose 1.8% yoy, sharply outperforming expectations for a -2.1% decline. The improvement was largely driven by stronger spending in infrastructure and manufacturing. Excluding property development, investment increased 5.2% from a year earlier.
However, the property sector remained a major drag on the economy. Real estate development investment fell -11.1% in the first two months of the year, although the decline moderated from the -17.2% drop recorded in 2025.
China’s National Bureau of Statistics said the economy had made a “good start” to the year, but cautioned that external uncertainties, rising geopolitical risks and structural challenges continue to pose difficulties for businesses and the broader economic transition.
