Data from the National Bureau of Statistics indicates a strong start for the Chinese economy in the first quarter, with the contribution rate of domestic demand reaching 84.7%, an increase of nearly 30 percentage points compared to the same period last year. Key metrics showed notable improvement: fixed-asset investment shifted from decline to growth, service consumption maintained rapid growth, and the Producer Price Index (PPI) ended a 41-month consecutive year-on-year decline.
The contribution rate of domestic demand is a vital perspective for observation and an important indicator for tracking economic performance. The significant rise in this rate fully demonstrates the current capacity of consumption and investment to drive economic growth. From the perspective of economic circulation, the economic activities linked to and stimulated by domestic demand played a crucial supporting role in stabilizing the national economy in the first quarter.
Stable investment policies accelerated their effects during the first quarter. Nationwide fixed-asset investment (excluding rural households) reached 10.2708 trillion yuan, achieving a year-on-year growth of 1.7% and turning positive from negative. Since the beginning of the year, various regions and departments have continuously expanded domestic demand and optimized supply, deeply tapping into the potential of effective investment. They issued lists for major projects and central government budget investment plans, enhanced the efficiency of utilizing ultra-long-term special government bonds and local government special bonds, improved long-term mechanisms for private enterprise participation in major projects, and adopted multiple measures to turn investment growth positive, effectively leveraging investment's key role in optimizing supply.
The accelerated commencement of major projects was a significant factor in halting the decline and stabilizing investment. In the first quarter, investment in projects with a total planned investment of 100 million yuan or more grew by 4.5%. Accelerated investment in sectors like railways and energy drove infrastructure investment growth to 8.9%, which was 7.2 percentage points higher than the overall investment growth rate.
Manufacturing investment is also recovering at a faster pace. With the upgrading of traditional industries and the accelerated development of emerging industries, manufacturing investment showed a steady rebound. In the first quarter, manufacturing investment increased by 4.1% year-on-year, a rate 3.5 percentage points faster than the full-year rate for 2025.
The improvement in first-quarter investment was not driven by a single factor but resulted from coordinated efforts between the government and the market, with momentum for investment recovery continuously accumulating. On one hand, government efforts were front-loaded, enhancing efficiency and providing effective support for major projects. On the other hand, the market side showed marginal improvements. Although the total volume of private investment is still in a recovery phase, positive signals emerged structurally. From January to March, excluding real estate development investment, private investment achieved a growth of 1.3%, with the growth rate accelerating compared to the January-February period. Surveys in some eastern regions indicated a relatively fast recovery in private manufacturing investment, with increased corporate spending on equipment updates, technological transformation, and intelligent upgrades.
Beyond the stabilization and recovery of growth rates, the investment structure is also continuously optimizing. Investment in emerging sectors has become a new engine for growth. In the first quarter, investment in high-tech manufacturing grew by 5.2% year-on-year, with investment in aerospace equipment and manufacturing, and electronic and communication equipment manufacturing increasing by 19% and 6.6%, respectively. The extension of producer services towards specialization and the high end of the value chain has effectively activated new investment momentum. Investment in high-tech services grew by 12.3% year-on-year in the first quarter, with investment in professional technical services and information services increasing by 29.5% and 20.9%, respectively. Concurrently, investment in intellectual property products grew rapidly, with a growth rate of 7.9% in the first quarter, accounting for over 12% of total investment.
The large-scale equipment renewal initiative continued to exert force, driving a 13.9% growth in investment for equipment, tools, and器具 purchases in the first quarter. This indicates that current investment is not merely about expanding scale but more about updating equipment, retrofitting production lines, and enhancing efficiency. Such investments create not only immediate demand but also future production capacity and competitiveness.
The consumer market experienced steady growth. Consumption, being the final demand, is the fundamental force driving economic growth. This year, various regions and departments have deeply implemented actions to boost consumption, enhanced the quality and efficiency of policies for replacing old consumer goods, accelerated the cultivation of new growth points in service consumption, and fostered a positive trend in the consumer market. In the first quarter, total retail sales of consumer goods reached 12.7695 trillion yuan, a year-on-year increase of 2.4%, which was 0.7 percentage points faster than the growth rate in the fourth quarter of last year.
Goods consumption remained stable with an upward trend. Retail sales of goods increased by 2.2% year-on-year in the first quarter, 0.7 percentage points faster than the fourth quarter of the previous year. The enhanced policy for replacing old consumer goods continued to show its effect on driving consumption. In the first quarter, sales revenue from the replacement of old consumer goods exceeded 430 billion yuan, benefiting over 60 million people. Green consumption showed strong growth momentum; in March, the penetration rate of new energy vehicle retail sales in the domestic market reached 51.5%, and sales of energy-efficient and green products grew rapidly.
With the implementation of plans to accelerate the cultivation of new growth points in service consumption, service consumption maintained rapid growth. In the first quarter, retail sales of services increased by 5.5% year-on-year, 3.3 percentage points higher than the growth rate of goods retail sales. Holiday consumption continued to heat up, with a significant increase in resident travel, continuously releasing consumption potential in cultural tourism, sports events, and other areas. Retail sales in cultural, sports, and leisure services, as well as travel consulting and rental services, maintained double-digit growth in the first quarter.
The potential of new forms of consumption is being released at an accelerated pace. New business formats, models, and scenarios are continuously emerging, with online consumption and digital consumption developing favorably. In the first quarter, online retail sales of goods and services increased by 8% year-on-year, significantly faster than the growth of total retail sales of consumer goods. Online retail sales of goods grew by 7.5%, accounting for 24.8% of the total retail sales. New retail models like unattended stores and warehouse membership stores maintained double-digit growth in retail sales. Digital applications, including artificial intelligence, drove relatively fast growth in digital and information service consumption. Retail sales in communication and information services grew by over 10% in the first quarter.
The expansion of domestic demand also drove import growth. In the first quarter, imports of consumer goods reached 418.92 billion yuan, a year-on-year increase of 5.4%. Imports of clothing and footwear, food, beverages, and tobacco, as well as cosmetics, increased by 8.7%, 8%, and 4.9%, respectively.
Efforts to expand domestic demand will continue. The next steps involve focusing on expanding effective domestic demand, formulating an implementation plan for the domestic demand expansion strategy for 2026-2030, and promoting the early commencement of qualified major projects. Efforts will continue to advance major projects, better leverage the driving and amplifying effect of government investment, and stimulate vitality in private investment.
Recently, in conjunction with relevant departments, a second batch of major project lists for 2026 was organized and issued, allocating 216.8 billion yuan from ultra-long-term special government bonds to support 336 major projects. These projects cover key areas such as artificial intelligence, urban underground pipeline network construction and renovation, transportation infrastructure in the Yangtze River Economic Belt, high-standard farmland, quality upgrading in higher education, and the "Three-North" Shelterbelt Forest Program. Combined with the previously allocated 389.7 billion yuan, the total funds arranged for major projects this year amount to 606.5 billion yuan, accounting for 76% of the annual 800 billion yuan plan, with a disbursement pace significantly faster than last year.
It is recommended to seize the current window of investment recovery. Efforts should focus on better leveraging the driving role of government investment to accelerate the formation of more physical工作量, while also continuously stabilizing corporate expectations and market confidence. Promoting coordinated efforts in manufacturing investment, private investment, and innovative investment can better connect short-term investment stabilization with long-term momentum enhancement, consolidating the improving trend of investment on the basis of stabilization.
In terms of expanding effective investment, it is considered that major projects identified in the 15th Five-Year Plan should be used as leverage to connect upstream and downstream industrial and supply chains, thereby promoting the expansion of effective investment. For boosting consumption, multiple measures should be taken to increase household income, broaden income channels, further strengthen social security, and build a long-term mechanism conducive to willingness, confidence, and ability to consume.
Currently, residents' consumption capacity and willingness need further enhancement, and the supply of high-quality goods and services cannot fully meet diverse consumption demands. It is essential to fully implement the directives of the Central Economic Work Conference and the National People's Congress sessions, focus on building a strong domestic market, further stabilize employment and promote income growth, vigorously optimize the consumption environment, collaboratively innovate consumption models, continuously unleash consumption potential, and promote sustained, stable, and healthy economic development.
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