China’s retail sales for January and February increased by 4.0%, matching expectations and up from 3.7% previously. Industrial production rose to 5.9%, surpassing the expected 5.3%, although it slipped from 6.2% last year.
Fixed asset investment saw a rise to 4.1%, meeting prior expectations of 3.2%. However, the unemployment rate increased to 5.4%, higher than the predicted 5.1%.
Property Market Challenges
Property investment dropped by 9.8% year-on-year, with property sales and new construction starts decreasing by 5.1% and 29.6% respectively. China’s stimulus measures include a 30-point plan to enhance domestic consumption and eased housing finance rules in Shenzhen.
The economic data out of China presents a mixed picture. Retail sales rose in line with forecasts, showing steady consumer demand. Meanwhile, industrial production came in stronger than expected, though it slowed compared to the previous year. Fixed asset investment picked up as projected, supporting infrastructure and long-term growth. However, the labour market showed some strain, with unemployment rising more than anticipated.
The property sector remains under pressure. Investment in real estate declined further, while both sales and new construction weakened. This reflects ongoing difficulties in the housing market despite efforts to support demand. Authorities have introduced measures to encourage spending, such as plans aimed at boosting domestic consumption. There have also been steps to ease financial conditions for homebuyers in at least one major city.
Recently released figures suggest a mixed outlook for the coming weeks. Consumer activity appears to be holding firm, but manufacturing output, while above expectations, shows signs of moderation. Policymakers are taking steps to support economic momentum, yet structural challenges remain.
Policy And Market Outlook
With the real estate market still struggling, any policy adjustments will be closely examined. Further efforts to stabilise the sector would indicate greater urgency from officials. At the same time, employment trends deserve close attention. A rise in joblessness beyond forecasts has the potential to weigh on confidence, particularly if it continues into the next round of reports.
Market participants must navigate these developments carefully. Incoming data points will shape expectations, particularly regarding the effectiveness of current policies. A combination of government action and economic resilience will determine whether momentum can be maintained in the near term.
