China’s national economy started the year on a steady note, showing new signs of positive momentum. Official data released on Monday revealed that industrial output, retail sales, and fixed-asset investment all recorded faster growth compared to the same period last year. In January and February, the total value added by industrial enterprises above a designated size increased by 5.9 percent year-on-year, slightly outpacing the full-year growth rate of 2024, according to the National Bureau of Statistics (NBS).

The services sector also demonstrated strong growth, particularly in modern services. The Index of Services Production rose by 5.6 percent year-on-year, which was 0.4 percentage points higher than the overall growth rate in 2024. Retail sales across the country reached 8.37 trillion yuan ($1.16 trillion) in the first two months of 2025, reflecting a 4 percent increase from the previous year. The growth rate of retail sales was 0.5 percentage points higher than in 2024, driven in part by rising consumer demand. Notably, retail sales of enterprises above the designated size saw significant increases, with sales of communication equipment up by 26.2 percent, cultural and office supplies rising by 21.8 percent, furniture growing by 11.7 percent, and household appliances and audio-visual equipment increasing by 10.9 percent. Fixed-asset investment also performed well, totaling 5.26 trillion yuan during the period, which was a 4.1 percent increase from the previous year. This represented a 0.9 percentage-point improvement compared to the full-year growth rate in 2024. According to analysts at Morgan Stanley, the data surpassed expectations due to policy-driven increases in industrial production, infrastructure capital expenditure, and consumer goods trade-ins. They highlighted that fixed-asset investment exceeded forecasts, with a notable uptick in housing investment, as well as stronger-than-expected growth in manufacturing and infrastructure investments.

Fu Linghui, an NBS spokesperson, emphasized that China’s macroeconomic policies have been effective in delivering tangible results. He noted that ongoing reforms and the countrys deepening opening-up efforts have bolstered social confidence, laying a strong foundation for achieving the targeted annual economic growth of around 5 percent. The services sector has been a key driver of this recovery, playing a crucial role in job creation for new workforce entrants, according to economist Tian Yun. Given the steady recovery in consumption and investment, Tian believes that the 5 percent growth target is well within reach. To further stimulate domestic demand, the Communist Party of China Central Committee and the State Council recently introduced an action plan aimed at boosting consumption. This initiative seeks to enhance household spending power by increasing incomes and reducing financial burdens. With the conclusion of China’s annual legislative sessions, policy implementation is accelerating, and improved policy measures are expected to strengthen domestic demand while offsetting external risks such as tariff hikes by the United States, according to Wen Bin, chief economist at China Minsheng Bank.

Despite these positive indicators, challenges remain. Fu cautioned that the global economic environment is becoming increasingly complex and uncertain. Domestically, weak demand persists, some enterprises continue to struggle with production and operational difficulties, and the foundations for sustained economic recovery remain fragile. Data from the first two months of 2025 showed that China’s total merchandise trade amounted to 6.54 trillion yuan, marking a 1.2 percent decline from the previous year. While exports rose by 3.4 percent to 3.88 trillion yuan, imports fell by 7.3 percent to 2.66 trillion yuan. Exports remained resilient, particularly in key sectors such as mechanical and electrical products, demonstrating Chinas strong competitiveness in global markets despite external challenges. However, Tian stressed the need for continued vigilance in foreign trade, urging further efforts to stabilize the real estate and stock markets, as these sectors are critical to sustaining consumer confidence and attracting foreign investment. Looking ahead, Fu expressed optimism about China’s economic trajectory in 2025. He pointed out that the country’s vast market, comprehensive industrial system, and abundant human capital provide strong advantages for long-term stability and growth. As structural adjustments continue and new policy measures take effect, China’s economy is expected to maintain steady progress throughout the first quarter and beyond.

Disclaimer: This Image is taken from Global times.