China’s industrial production and retail sales increased more than expected during the first two months of 2026, signaling resilience in the country’s economy. Strong manufacturing activity and higher consumer spending during the Lunar New Year holiday helped support the latest economic data.
According to official government figures released on Monday, industrial production rose 6.3% year-on-year in the January–February period. The result exceeded market expectations of 5.3% and marked a noticeable acceleration from the 5.2% growth recorded in the previous month.
At the same time, retail sales in China grew 2.8%, slightly above forecasts of 2.6%. The increase was largely driven by stronger consumer spending during the Lunar New Year celebrations in early February, a period traditionally associated with higher retail activity.
China also reported an improvement in fixed asset investment, an important indicator of capital spending and infrastructure development. Investment increased by 1.8% during the January–February period, outperforming expectations that had predicted a 5.0% decline.
The rise in fixed asset investment marks the first expansion since August 2025, suggesting that business confidence may be gradually improving as the Chinese government continues to introduce fiscal stimulus measures to support economic growth.
However, the data also revealed some challenges. China’s unemployment rate rose to 5.3% in January–February, up from 5.1% in the previous month, indicating ongoing pressure in parts of the labor market.
Overall, the latest figures highlight strong manufacturing activity in China, which remains a key driver of the country’s economic growth, particularly as export demand for Chinese goods stays robust.
The data also suggests that consumer spending is recovering, although analysts note that it remains uncertain whether the recent improvement will continue once the holiday-related spending boost fades.
