NBS: Economy on track to sustain recovery momentum

China's retail sales and investment growth accelerated in the January-February period, official data showed on Monday, signaling a strong start to the year and offering an early boost for the country's goal of achieving an annual growth target of around 5 percent.

Officials and economists said the better-than-expected demand and supply performance indicates the economy gained steam in the first two months, setting the stage for robust performance in the first quarter, which will also be driven by steady recovery in domestic demand.

"Compared with the figures in December, we see some moderation in industrial production growth and acceleration in fixed-asset investment and retail sales growth," said Lu Ting, chief China economist at Nomura. "Since last year was a leap year with one more day in February, the year-on-year growth data might have been a bit higher if adjusted accordingly."

Retail sales — a key measurement of consumer spending — increased 4 percent year-on-year in the January-February period, after a 3.7 percent rise in December, according to data released on Monday by the National Bureau of Statistics.

China's value-added industrial output grew 5.9 percent year-on-year in the first two months, after a 6.2 percent increase in December, while fixed-asset investment grew 4.1 percent in the January-February period, compared with a 3.2 percent rise during the whole of 2024.

"The data supports our forecast of 5 percent year-on-year GDP growth for the first quarter. We expect the country to step up supportive measures after midyear to try to achieve the around 5 percent GDP growth target," Lu said.

Addressing a news conference on Monday in Beijing, NBS spokesman Fu Linghui said that China's economy is on track to sustain the momentum of recovery this year. The economy will likely get off to a steady start in the first quarter, thanks to the continued recovery trend, the gradual improvement in domestic demand, macro policies taking effect gradually and the improvement in market confidence and expectations, Fu said.

Stimulating domestic demand and boosting consumption are among China's top priorities this year as it seeks to buffer the impact of the United States' tariff hikes.

On Sunday, the General Office of the Communist Party of China Central Committee and the General Office of the State Council, China's Cabinet, issued a special action plan to boost consumption. According to the plan, the country will ramp up its support for the trade-in program for consumer goods and utilize more fiscal funds to empower local authorities in expanding these initiatives.

In its 2025 Government Work Report, delivered during the annual two sessions, China announced that it will double ultra-long-term special treasury bonds earmarked for its trade-in program to 300 billion yuan ($41.48 billion) this year.

Speaking at a separate news conference held in Beijing on Monday, Li Chunlin, deputy head of the National Development and Reform Commission, said the first allotment of 81 billion yuan had been distributed among local governments in early January.

Under the trade-in program, retail sales of new energy passenger vehicles nationwide reached around 1.34 million units in the first two months, while sales of home appliances with high energy efficiency totaled 24.1 billion yuan during the same period, marking a year-on-year increase of 26 percent and 36 percent, respectively, Li said.

Guo Chunli, vice-president of the Chinese Academy of Macroeconomic Research, said, "China's consumption is projected to see a robust recovery this year, with existing policies taking effect gradually and more stimulus measures in the pipeline."

Concerted efforts to stabilize the capital market and reverse declines in the property sector are expected to anchor asset valuations and improve consumers' willingness to spend, she said.

Guo noted that China is extending its program for large-scale equipment upgrading and trade-in deals for consumer goods and expanding the scope to more consumption fields. New types of consumption related to the debut economy, the ice and snow economy, and the silver economy are providing new consumption momentum, she said.