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China retail sales, industrial data for first 2 months beats expectations


High-rise residential and commercial buildings are being constructed near Dongyu Road, Qiantan, in the Pudong New Area of Shanghai, China, on March 15, 2024. 

Nurphoto | Nurphoto | Getty Images

BEIJING —  China’s economic data for the first two months of the year beat analysts’ expectations across the board on Monday.

Retail sales rose 5.5%, better than the 5.2% increase forecast in a Reuters poll, while industrial production climbed 7%, compared with estimates of 5% growth.

Fixed asset investment rose by 4.2%, more than the 3.2% estimated by analysts.

The unemployment rate in February for cities came in at 5.3%.

Online retail sales of physical goods rose 14.4% from a year earlier during the first two months of the year.

Investment into real estate fell 9% in the first two months of the year from a year ago. Investment in infrastructure rose by 6.3% while those in manufacturing increased by 9.4% during that time.

Finding opportunities in emerging markets

“We believe China’s sequential growth momentum remained solid in Q1 despite notable divergence across sectors,” Goldman Sachs analysts said in a report Monday following the data release.

“However, to secure the ambitious “around 5%” growth target this year, more policy easing is still necessary, especially on the demand-side (e.g., fiscal, housing and consumption).”

Despite the upbeat results, National Bureau of Statistics Spokesperson Liu Aihua cautioned that domestic demand remains insufficient.

She told reporters that real estate remains in a period of “adjustment,” and that the overall economy is “in a critical period of recovery, transformation and upgrading,” according to a CNBC translation of her comments in Mandarin.

When asked about the unemployment rate for people aged 16 to 24, Liu said the figures would be released a few days after the monthly press conference on economic data.

Holiday boost

Economic figures for January and February are typically combined in China to smooth out variations from the Lunar New Year, which can fall in either month depending on the calendar year. It is the country’s biggest national holiday, in which factories and businesses remain closed for at least a week.

This year, the number of domestic tourist trips and revenue during the holiday grew compared with last year as well as pre-pandemic figures from 2019. But Nomura’s Chief China Economist Ting Lu pointed out that “average tourism spending per trip was still 9.5% below pre-pandemic levels in 2019.”

Retail sales did not rebound from the pandemic as strongly as many had expected as consumers have grown uncertain about their future income.

“Consumers were buoyed temporarily by festivities-related spending at this start of the year. In the absence of decisive consumption-related stimulus this year, we think it would be difficult to sustain a robust consumer spending pace this year,” Oxford Economics’ Chief Economist Louise Loo said in a report on Monday.

Lackluster demand

New loans in February missed expectations and fell from the prior month, “even after…



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China retail sales, industrial data for first 2 months beats expectations

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