China's fixed-asset investment growth turned positive, reversing the persistent negative trend since last September. In early 2026, the Chinese economy achieved a strong start, with major economic indicators showing significant improvement. Industrial output and consumption growth accelerated substantially, while fixed-asset investment growth shifted from negative to positive, ending the continuous decline observed since September of the previous year.
Data released by the National Bureau of Statistics on March 16 indicated that from January to February, the value-added of industrial enterprises above the designated size increased by 6.3% year-on-year, accelerating by 1.1 percentage points compared to December of the previous year. Total retail sales of consumer goods grew by 2.8% year-on-year, up by 1.9 percentage points. National fixed-asset investment (excluding rural households) rose by 1.8% year-on-year, compared to a decline of 3.8% for the full previous year.
During a press conference at the State Council Information Office, the NBS spokesperson described the economic performance in January and February as a strong and favorable beginning. Despite fluctuations in the international environment and rising external risks, particularly the spillover effects of geopolitical conflicts, China implemented more proactive and effective macroeconomic policies. Production and supply saw rapid growth in the first two months, domestic demand expanded steadily, employment and prices remained generally stable, and new quality productive forces were cultivated and strengthened.
An analysis by the chief economist of Yuekai Securities noted that the later timing of the Spring Festival this year caused a shift in the "pre-holiday rush, holiday shutdown, and post-holiday resumption" cycle, technically boosting the year-on-year data for January and February. However, March data might experience a counteracting downward pressure. It was cautioned against over-optimism regarding the strong start in the first two months, and a potential slowdown in March should not be simplistically interpreted as a weakening of economic momentum. Evaluating the true economic trend by combining first-quarter data was recommended.
Industrial growth accelerated, becoming a highlight of the early-year economic performance. As more proactive macroeconomic policies continued to take effect, construction in key areas progressed solidly, and policies supporting new initiatives were implemented sequentially, new growth drivers developed rapidly. Enhanced contributions from foreign trade exports also contributed to the noticeable acceleration in industrial production during January and February.
Data showed that the value-added of industrial enterprises above the designated size grew by 6.3% year-on-year in the first two months, 1.1 percentage points faster than in December. Most industries and products saw improved growth rates; among 41 major industrial categories, 31 experienced accelerated growth compared to December, representing a recovery rate of 75.6%. Among over 600 key monitored products, more than 350 saw growth rates improve from December, with a recovery rate close to 60%.
Structurally, equipment manufacturing provided significant support. In the first two months, value-added in equipment manufacturing above the designated size increased by 9.3%, accounting for 33.5% of all large-scale industry. Notably, manufacturing of computers, communication equipment, and other electronic devices, as well as manufacturing of railway, ship, aerospace, and other transport equipment, saw value-added growth of 14.2% and 13.7%, respectively.
With the ongoing digital and intelligent transformation of industry, new growth drivers steadily developed. Value-added in high-tech manufacturing above the designated size increased by 13.1% year-on-year in the first two months, while digital product manufacturing grew by 8.8%. Manufacturing of intelligent vehicle equipment and intelligent unmanned aerial vehicles surged by 46.3% and 26.6%, respectively, reflecting expanding demand for intelligent industrial products.
Regarding the future trajectory of industrial performance, the chief macro analyst of Golden Credit Rating International anticipated that due to the later Spring Festival and pre-holiday rush effects, the negative impact of the holiday on industrial production would extend into March. Coupled with a likely significant slowdown in export growth, the pull on industrial production would weaken. Consequently, the year-on-year growth rate of industrial value-added in March was expected to slow to around 5%. For the full year, trends such as declining export growth, continued adjustment in the domestic real estate market, and ongoing efforts against internal inefficiencies might impact industrial production from both supply and demand sides.
The NBS spokesperson stated that the effects of international geopolitical conflicts are still evolving, with numerous external uncertainties. Domestically, supply strength contrasts with relatively weaker demand, meaning industrial production still faces considerable pressure. Moving forward, efforts will focus on building a strong domestic market, deepening the development of a unified national market, integrating technological and industrial innovation, optimizing traditional industries, cultivating emerging and future industries, accelerating the construction of a modern industrial system, and promoting sustained and healthy industrial economic development.
On stabilizing industrial growth, the Minister of Industry and Information Technology recently stated that this year will see the implementation of a new round of stabilization measures for ten key industries, supporting major industrial provinces and cities in playing a leading role. Policies will target both supply and demand, employing a combination of measures to expand consumption, promote investment, stabilize exports, and attract more resources—including advanced technology, scientific services, talent, patient capital, and venture capital—to cluster in the manufacturing sector, establishing a mechanism to maintain a reasonable proportion of manufacturing investment.
Retail sales growth rebounded significantly. From January to February, total retail sales of consumer goods reached 8,607.9 billion yuan, increasing by 2.8% year-on-year, 1.9 percentage points faster than December. Service retail sales grew by 5.6% year-on-year, 0.1 percentage points faster than the full previous year.
The spokesperson attributed the clear rebound in market sales since the start of the year to pro-consumption policies and the influence of the extended Spring Festival holiday, which released pent-up potential in service consumption and enhanced new consumption drivers. Driven by the holiday, cultural and tourism consumption increased noticeably, boosting related service sales. In the first two months, retail sales for tourism consulting, leasing services, and cultural-sports-leisure services maintained rapid growth exceeding 10%. During the Spring Festival period, domestic trips approached 600 million, with total travel spending exceeding 800 billion yuan, both setting new records. Additionally, expanded visa-free entry policies increased inbound tourists, further stimulating domestic market sales.
Increased social gatherings and activities during the holiday also led to a significant expansion in catering consumption. Catering revenue grew by 4.8% year-on-year in the first two months, accelerating by 2.6 percentage points from December. While service consumption expanded steadily, goods consumption also showed positive trends of quality improvement and upgrading. Retail sales of grain, oil, food, and clothing, footwear, and textiles by units above the designated size increased by 10.2% and 10.4%, respectively.
The high growth in basic living goods was primarily due to rising consumer demands for higher quality and grade. For instance, while total food consumption is limited, sales growth stemmed more from increased demand for green and healthy foods. Driven by consumption upgrades, sales of goods related to developmental and improvement-oriented needs grew rapidly. Retail sales of gold, silver, and jewelry by units above the designated size increased by 13% year-on-year.
The effects of policies promoting the replacement of old consumer goods continued to show. Retail sales of communication equipment by units above the designated size grew by 17.8%, maintaining rapid growth, while household appliances and audio-video equipment sales increased by 3.3%, a significant rebound from December.
Looking ahead, the spokesperson noted that upgrading consumption structures and the strengthening of new consumption drivers remain key factors influencing consumption growth. The implementation of a series of pro-consumption policies is expected to further boost consumption, supporting sustained and stable growth. However, continuous effort is still needed to build a strong domestic market and stimulate endogenous consumer motivation.
Investment growth turned positive. In January-February, investment growth shifted into positive territory, ending the negative trend since last September. National fixed-asset investment increased by 1.8% year-on-year, compared to a 3.8% decline for the full previous year. Excluding real estate development investment, national fixed-asset investment grew by 5.2%.
The spokesperson explained that fixed-asset investment declined last year due to multiple factors. This year, supported by policies aimed at expanding effective investment, investment growth has turned from decline to increase. Investment in key sectors grew rapidly, playing a positive role in optimizing supply structure and expanding market demand.
By sector, infrastructure investment grew by 11.4% year-on-year in January-February, accelerating by 10.8 percentage points from the full previous year and contributing 3 percentage points to overall investment growth. The spokesperson analyzed that as this year marks the start of the 15th Five-Year Plan period, the commencement of several major infrastructure projects drove related investment growth. The pace of starting large projects accelerated, with investment in projects with a total planned investment of 100 million yuan or more growing by 5% year-on-year.
Manufacturing investment increased by 3.1% year-on-year in January-February. An analysis by the chief economist of Golden Credit Rating International suggested that, given the emphasis in the government work report on "accelerating the cultivation of new growth drivers" and "achieving greater self-reliance and strength in science and technology" as key tasks, investment in high-tech manufacturing is expected to maintain rapid growth. Manufacturing investment growth might further increase in the first quarter.
Structurally, regions are developing new quality productive forces based on local conditions, deeply integrating technological and industrial innovation. Investment related to new growth drivers achieved rapid growth. High-tech industry investment grew by 5.1% year-on-year in the first two months, with investment in aerospace equipment manufacturing and information services increasing by 20.2% and 16.5%, respectively. With enhanced industrial technological capabilities, high-end equipment manufacturing developed favorably, and related investment grew rapidly. Investment in railway, ship, aerospace, and other transport equipment manufacturing surged by 31.1%.
Since the start of the year, efforts to promote construction in key areas and support large-scale equipment upgrades, coupled with increased project funding, have contributed to investment growth. Investment by state-holding enterprises grew by 7.7% year-on-year in January-February, significantly faster than the full previous year, while investment in equipment, tools, and器具 purchases increased by 11.5%. Concurrently, policies promoting private investment were actively implemented to enhance its vitality. Private investment in infrastructure grew by 9%.
These developments demonstrate a relatively clear effect of government investment in leading and driving private investment. However, the spokesperson also pointed out that while positive changes are evident, the complex and severe international environment, adjustments in the domestic real estate market, and relatively weak corporate profitability continue to constrain investment growth.
The chief economist of China Minsheng Banking Corp., Ltd. indicated that this year's government work report set a growth target of 4.5% to 5%, aiming for "better results in practical work." Fiscal expenditure will maintain a considerable scale, structural monetary policy tools will be optimized and innovated, and efforts to expand domestic demand will be significantly intensified. Considering base effects, the full-year economic growth rate is expected to follow a pattern of lower first half and higher second half, with the possibility of exceeding expectations.
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