China retail sales strengthen at start of 2025, industrial data beats
A woman, right, looks at herself on her phone as she and others buy warm winter hats at a vendors shop in the Panjiayuan Market on December 6, 2024 in Beijing, China.
Kevin Frayer | Getty Images
China’s economy experienced a slight improvement in the first two months of the year, as reported by the National Bureau of Statistics. Retail sales saw a 4.0% increase in the January-February period compared to the previous year, while industrial production climbed by 5.9%. Fixed asset investment also rose by 4.1%, beating economists’ expectations.
The data showed that the economic activities were influenced by stimulus measures, but challenges such as a complex external environment and insufficient domestic demand remain. The statistics agency emphasized the need for a stable foundation for sustained economic recovery.
Following the release of the economic data, Chinese policymakers unveiled plans to stimulate domestic consumption and boost residents’ income. While the details of the plan were not fully disclosed, it reflects Beijing’s efforts to address issues like slowing income growth and lack of social safety nets.
This move is seen as a positive step towards transitioning to a consumption-driven economy in the long term.
In February, China’s urban unemployment rate reached 5.4%, the highest in two years, based on official figures. Additionally, new home prices fell by 4.8% in February, with a smaller decline compared to the previous month.
Real estate development investment also saw a decrease, reflecting policymakers’ efforts to provide credit support to developers facing financial challenges.
Despite setting a growth target of “around 5%” for the year, Chinese leadership acknowledged the difficulty of achieving this goal due to trade tensions with the U.S. and deflationary pressures. To support growth, Beijing may need to implement stronger stimulus measures and focus on boosting domestic consumption.
Amidst challenges such as slowing exports and negative inflation, policymakers revised down the annual inflation target and pledged additional funds to support consumers. However, the effectiveness of these measures in boosting consumption remains uncertain.
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