Better than expected showing in Jan-Feb as experts highlight policy, exports

China’s economy has got off to a solid start in 2026, with major indicators delivering better-than-expected results in the first two months of the year, laying the foundation for achieving the annual growth target and opening the 15th Five-Year Plan (2026-30) period on a firm footing.

While the broader economy still faces challenges from an evolving external environment, rising geopolitical tensions, and lingering structural pressures at home, officials, economists and global business leaders remain broadly optimistic about the outlook.

They pointed to the resilience of the manufacturing and export sectors and the prospect of a rebound in domestic demand, supported by a more proactive macroeconomic policy stance.

Sheana Yue, a senior economist at British think tank Oxford Economics, said: “Retail sales exceeded expectations on the back of festive spending. Export-linked manufacturing and policy-supported industrial upgrading continue to offset persistent weakness in property, private investment, and goods consumption.”

Data released on March 16 by the National Bureau of Statistics showed that China’s value-added industrial output grew 6.3 percent during the January-February period from a year earlier, after a 5.2 percent rise in December.

Yue noted that the outperformance likely reflects continued strength in high-tech manufacturing, including transportation equipment and electrical machinery, which grew 13.1 percent year-on-year during the first two months.

According to the NBS, retail sales — a key measurement of consumer spending — surged 2.8 percent year-on-year over the January-February period after a 0.9 percent rise in December. Fixed-asset investment increased 1.8 percent over the January-February period, compared with a 3.8 percent decline in 2025.

Addressing a news conference on March 16 in Beijing, NBS spokesman Fu Linghui said that China’s economic performance in the first two months of the year came in “better than market expectations”.

While acknowledging that domestic and external challenges remain intertwined and uncertainties persist, he said the fundamental conditions supporting China’s long-term growth remain unchanged.

Wen Bin, chief economist at China Minsheng Bank, said that growth may strengthen further as the year progresses, aided by a more proactive macro policy stance and base effects, with the possibility of outperforming expectations.

Sun Xuegong, director-general of the department of policy study and consultation at the Chinese Academy of Macroeconomic Research, said China’s 2026 economic growth target of between 4.5 percent and 5 percent is “fully achievable”.

Sun said favorable conditions remain in place — including the rapid development of new quality productive forces, structural upgrading in traditional industries, and faster expansion of the service sector. On the demand side, he expects steady consumption growth, a potential rebound in investment, and resilient exports.

Following China’s robust economic performance and the positive signals from the recently concluded two sessions, global executives also expressed confidence in the nation’s economic prospects.

Lin Chunmei, president and general manager at Corning Greater China, said: “As the first year of the 15th Five-Year Plan, 2026 sees China setting an economic growth target that is both stable and developmental, aligning with the core demand of foreign firms for development certainty.”

Amid firm confidence over the Chinese market, Corning, a US-based materials science firm, announced last year an additional investment of $500 million in China, which will be implemented in the first year of the 15th Five-Year Plan period.

Contact the writers at ouyangshijia@chinadaily.com.cn