China’s Economic Data Surpasses Expectations Amid Policy Easing Calls

China’s economic data for the first two months of the year exceeded analysts’ expectations across various sectors, as announced on Monday.

“Retail sales rose 5.5%, better than the 5.2% increase forecast in a Reuters poll,” reported the official sources. Similarly, industrial production saw a significant climb of 7%, compared to the estimated 5% growth. Fixed asset investment also showed strength, rising by 4.2%, surpassing analysts’ expectations of 3.2%.

The unemployment rate for cities in February was reported at 5.3%, indicating a stable employment situation. Meanwhile, online retail sales of physical goods experienced robust growth, rising by 14.4% from the previous year during the first two months of the year.

However, investment in real estate witnessed a decline of 9% compared to the same period last year. On a positive note, investment in infrastructure surged by 6.3%, and manufacturing investments also saw a notable increase of 9.4% during this timeframe.

Goldman Sachs analysts expressed optimism about China’s growth momentum, stating, “We believe China’s sequential growth momentum remained solid in Q1 despite notable divergence across sectors.” They also emphasized the need for further policy easing to achieve the ambitious growth target of “around 5%” this year, particularly focusing on demand-side measures such as fiscal policies, housing, and consumption support.

Despite the encouraging data, National Bureau of Statistics Spokesperson Liu Aihua cautioned about the ongoing challenges. She noted that domestic demand still faces inadequacies and highlighted the real estate sector’s ongoing adjustment phase. Liu emphasized that the overall economy is currently in a critical phase of recovery, transformation, and upgrading.

Regarding the unemployment rate for individuals aged 16 to 24, Liu mentioned that the specific figures would be released a few days after the monthly press conference on economic data, indicating ongoing monitoring and evaluation of labor market dynamics.