Shortly after the conclusion of the National People's Congress and the Chinese People's Political Consultative Conference sessions, China's economy has delivered a performance that exceeded expectations. Imports and exports surged by double digits, consumption growth accelerated, and investment shifted from decline to growth. Economic data for January and February released by the National Bureau of Statistics on the 16th indicated that all three key drivers of economic growth have gained momentum.
Against a backdrop of international volatility, how has China's economy withstood pressure and achieved a stable start to the year? Wen Bin, Chief Economist at China Minsheng Bank, highlighted two key factors: the visible effects of policy measures and a rebound in endogenous momentum. "On one hand, the front-loading of special bond issuance has boosted infrastructure investment, and the property market is showing early signs of a mini-recovery. On the other hand, better-than-expected exports and continued price recovery have stimulated manufacturing investment, while extended holidays have also supported household consumption, particularly in services," Wen explained. The combination of these forces has underpinned the economic foundation at the beginning of the year.
Two economic indicators stood out in this report. The first is foreign trade. In the first two months, the total value of goods imports and exports reached 7.7321 trillion yuan, a year-on-year increase of 18.3%, which was 13.4 percentage points faster than the growth rate in December of the previous year. Exports, in particular, surged by 19.2%. This data exceeded market expectations. Given that the base for foreign trade was already high last year, achieving such growth this year demonstrates the strong resilience and vitality of China's foreign trade sector.
Another noteworthy detail is that the rebound in goods imports outpaced that of exports. This sends two signals: domestic demand is recovering, and China is providing new opportunities for trade development with countries around the world.
The second standout indicator is consumption. Willingness to spend is a key barometer of economic vitality. In the first two months, total retail sales of consumer goods surpassed 8.6 trillion yuan, increasing by 2.8% year-on-year, which was 1.9 percentage points faster than the growth rate in December. Catering revenue exceeded one trillion yuan, reflecting a bustling consumer market.
Since the beginning of the year, driven by consumption-stimulating policies and the impact of the extended Spring Festival holiday, market sales have rebounded noticeably. The potential for service consumption has been unleashed, and new forms of consumption have gained momentum. For instance, the online short drama market has been booming, with platform data showing transaction volumes on online short drama platforms growing by over 30% in January and February. New business models such as green consumption, health-related consumption, and first-release economy are increasingly contributing to consumption growth.
Wen Bin believes that this year's Government Work Report maintains the priority of expanding domestic demand among its key tasks, calling for joint efforts to stimulate endogenous consumer motivation and implement consumption promotion policies to drive sustained consumption growth. The Government Work Report set this year's economic growth target between 4.5% and 5%. The strong performance in the first two months lays a solid foundation for achieving the annual target.
"Looking at the released data, the overall performance is significantly better than market expectations, fully reflecting the strong vitality and resilience of China's economy. We have every reason to be confident in China's economic development," said Fu Linghui, spokesperson for the National Bureau of Statistics, offering reassurance. With a powerful start and a favorable beginning, China's economy in the first year of the 15th Five-Year Plan period is highly anticipated.
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