On the morning of March 16, the State Council Information Office held a press conference detailing the performance of the national economy from January to February 2026. During this period, China's major economic indicators showed significant improvement, with growth rates in industrial added value, total retail sales of consumer goods, and fixed-asset investment drawing particular attention. Multiple international media outlets described the figures as exceeding expectations.
Reuters noted that China's economic foundation at the start of the year appears more stable. Accelerated industrial production, along with rebounds in retail sales and investment, has provided initial positive signals for policymakers. This resilience stems from surging demand for artificial intelligence-related technologies, which has driven export growth and boosted upstream manufacturing. Zhou Hao, Chief Economist at Guotai Junan International, commented, "Despite heightened risks from geopolitical tensions and disruptions in global trade and energy markets, the latest data indicate that China's growth foundation at the beginning of the year is more solid than previously anticipated."
A spokesperson for the National Bureau of Statistics stated that during January and February of this year, China implemented more proactive and effective macroeconomic policies, strengthened counter-cyclical and cross-cyclical adjustments, and continued to expand domestic demand while optimizing supply. Efforts focused on improving incremental growth and revitalizing existing assets, leading to accelerated production and supply growth, steady increases in market demand, generally stable employment and prices, and the expansion of new quality productive forces. As a result, the economy started the year with strong momentum, achieving a favorable opening.
Wan Zhe, a professor at Beijing Normal University, noted that China's strong economic performance at the beginning of 2026 lays a solid foundation for achieving the full-year economic targets.
The equipment manufacturing and high-tech manufacturing sectors demonstrated robust growth. Industrial production accelerated, with value-added output from equipment manufacturing rising by 9.3% year-on-year and high-tech manufacturing increasing by 13.1%. Both sectors outpaced the overall industrial growth rate by 3.0 and 6.8 percentage points, respectively. Reuters highlighted that the 6.3% growth in industrial output exceeded its forecast of 5%, marking the fastest expansion since last September.
In a report released on March 16, Iris Pang, Chief Economist for Greater China at ING, noted that the data continues to validate China's key industrial modernization strategy. Output of industrial robots surged by 31.1%, while manufacturing of computers, communication equipment, and other electronic devices (14.2%), as well as railway, ship, aerospace, and other transport equipment (13.7%), also performed strongly.
The services sector grew at a relatively fast pace, with modern services developing rapidly. The national services production index increased by 5.2% year-on-year, accelerating by 0.2 percentage points compared to December of the previous year. Market sales growth rebounded, with service retail sales rising by 5.6% year-on-year, up 0.1 percentage points from the full-year growth rate of the previous year. Total retail sales of consumer goods reached 8.6079 trillion yuan, an increase of 2.8% year-on-year, which Reuters noted as the largest gain since last October, surpassing analysts' expectations of 2.5%. The strong growth was partly attributed to the extended Chinese New Year holiday in February, which saw tourism spending increase by nearly 19% compared to the previous year.
Germany’s Berliner Zeitung reported that recent fiscal stimulus and targeted investment incentives from the Chinese government have helped boost domestic demand, with the recovery in retail markets indicating that these policies are now reaching consumers. The Australian Associated Press viewed the rebound in investment as another encouraging sign, noting that fixed-asset investment, including real estate and infrastructure, grew by 1.8% year-on-year in the first two months of the year, reversing an expected decline of 2.1% and turning positive after a 3.8% drop the previous year. Infrastructure investment led the rebound with an 11.4% increase, reflecting the effectiveness of policy support.
German website IT Boltwise stated that China's economy has shown unexpectedly strong recovery at the start of 2026, driven by a surge in domestic demand fueled by government incentives and recovering consumer spending. Investments in infrastructure projects and technological innovation have also contributed to the rebound, aligning with China's long-term strategy to enhance economic resilience and reduce reliance on external factors.
According to the South China Morning Post, resilient industrial output and retail sales, along with modest growth in fixed-asset investment, provide crucial support for China to achieve its annual economic growth target of 4.5% to 5% and withstand pressures amid global economic uncertainty. Bloomberg suggested that the overall economic improvement may delay the introduction of additional stimulus measures, with economists now expecting potential adjustments to policy rates and bank reserve requirements to occur later than previously anticipated.
Strong foreign trade performance also contributed to the robust start of the economy. In the first two months, total goods imports and exports reached 7.7321 trillion yuan, up 18.3% year-on-year, with exports growing by 19.2% and imports by 17.1%. General trade increased by 13.5%, while trade with Belt and Road partner countries rose by 20.0%. Exports by private enterprises grew by 22.8%, and mechanical and electrical product exports expanded by 24.3%.
An Azerbaijani news website highlighted that international companies operating in China are increasingly feeling this momentum, with imports and exports by foreign-invested enterprises totaling 2.2 trillion yuan in the first two months, up 15.3% year-on-year. In 2025, the number of newly established foreign-invested enterprises in China reached 70,392, a 19.1% increase from the previous year, with strong growth in sectors such as e-commerce services, medical device manufacturing, and aerospace. For many multinational corporations, China is no longer just a manufacturing base but is increasingly becoming a hub for research, development, testing, and mass production of next-generation products—from high-end industrial equipment to digital and green technologies—solidifying its position as a global innovation laboratory.
Meanwhile, China is strategically shifting toward a consumption-driven growth model. The South China Morning Post reported that the Chinese government announced additional consumption-boosting measures during the recently concluded National People's Congress sessions. The 2026 Government Work Report prioritized building a strong domestic market, with plans to continue large-scale consumer goods trade-in programs and issue an additional 250 billion yuan in ultra-long-term special government bonds to fund these initiatives.
The recently concluded Formula 1 Chinese Grand Prix in Shanghai set a record for the highest attendance in nearly two decades, reinforcing the city's status as a global event host and reflecting China's efforts to stimulate consumption. The three-day event attracted over 230,000 spectators, with official data showing that the 2025 Chinese Grand Prix generated direct economic impact of 2.47 billion yuan and indirect impact of 6.91 billion yuan, both up more than 75% year-on-year.
As tensions among the U.S., Israel, and Iran escalate, threatening global energy markets, external risks continue to intensify. Europe’s Modern Diplomacy website noted that rising oil prices and potential disruptions to shipping through the Strait of Hormuz could impact the global economy in the coming months, potentially increasing costs for Chinese manufacturers and weakening external demand.
The National Bureau of Statistics spokesperson stated that while recent geopolitical conflicts in the Middle East have caused fluctuations in international oil prices and raised market concerns, China possesses strong energy supply security and is well-positioned to cope with external market volatility. Uncertain factors affecting international energy prices remain, and the extent of their impact on domestic prices requires further observation.
CNBC reported that compared to other major economies, China may be better equipped to withstand the effects of a closure of the Strait of Hormuz, having diversified its energy sources and built strategic reserves over the past two decades. According to an article on the website of the Royal Institute of International Affairs, turmoil in the Gulf region may only reinforce Beijing's conviction that over-reliance on external conditions beyond its control carries inherent risks. In this sense, China views its shift toward enhanced resilience as both visionary and imperative, believing that today's resilience will safeguard tomorrow's prosperity.
Professor Wan Zhe emphasized that while the external environment for China's economic development in 2026 remains complex and challenging, focusing on domestic demand and strengthening the domestic market will be crucial for achieving annual growth targets and getting the 16th Five-Year Plan off to a good start. Additionally, fostering new quality productive forces in line with local conditions and cultivating new growth engines are essential for promoting high-quality development and sustaining balanced economic growth. With the continued expansion of new quality productive forces, the further release of domestic circulation vitality, and the advancement of high-level opening-up, China's economy not only has a solid foundation for achieving its annual goals but also possesses long-term resilience to navigate a complex external environment.
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