Prime Highlights:
Retail sales in China increased by 4.0% in January-February 2025, up from 3.7% in December, meeting analyst expectations.
Industrial production grew by 5.9% in the first two months of 2025, surpassing the 5.3% forecast, despite slowing from December’s 6.2% growth.
Key Background:
China’s economy showed signs of modest improvement in the early months of 2025, with both retail sales and industrial production exceeding expectations. According to data released by the National Bureau of Statistics, retail sales rose by 4.0% year-on-year in January and February, an increase from 3.7% growth in December and in line with analysts’ forecasts. Meanwhile, industrial output grew by 5.9%, slightly slower than December’s 6.2%, but outperforming the 5.3% predicted by experts.
The growth in industrial output was bolstered by a notable rise in the equipment-making and high-tech manufacturing sectors, which expanded by 10.6% and 9.1%, respectively. Fixed asset investment also saw an encouraging increase of 4.1%, surpassing the 3.6% expected by economists and improving from 3.2% growth recorded in the previous year.
Despite these positive figures, the statistics agency cautioned that the economic recovery remains fragile, citing external challenges, domestic demand issues, and operational difficulties faced by enterprises. Beijing’s efforts to stimulate domestic consumption were reinforced by a new wide-ranging plan announced by policymakers, which aims to enhance residents’ incomes and household spending.
However, challenges persist. China’s unemployment rate in urban areas reached 5.4% in February, the highest in two years, and real estate investment continued to decline. Furthermore, a slowdown in exports and weak domestic demand have raised concerns about achieving China’s ambitious annual growth target of around 5%. Economists have suggested that more aggressive stimulus measures may be necessary, particularly to boost consumption and offset potential export slowdowns. Overall, while the latest economic data reflects some positive momentum, experts emphasize that significant efforts are required to secure sustainable growth and meet annual economic goals.
