The highly anticipated comeback after Beijing lifted stringent Covid control measures in late 2022 was less robust than expected, and the world’s second-largest economy now grapples with turbulence in the property sector, high youth unemployment and flagging consumption.
In January and February combined, retail sales — the main indicator of household consumption — increased 5.5% year on year, China’s National Bureau of Statistics (NBS) said.
But the figure was down from December, which saw an increase of 7.4%, and was slightly below the result anticipated by a Bloomberg survey of analysts, who had predicted a rise of 5.6%.
The recording period included China’s major Lunar New Year holiday — this year falling in early February — which generally drives a consumption spike in the preceding weeks.
Industrial production, meanwhile, was up 7.0% year on year in January and February, NBS data showed, beating the 6.8% rise in December and the 5.2% predicted by Bloomberg.
China typically releases combined data for the first two months of the year, due to the Lunar New Year holiday.
Fixed asset investment was up 4.2% year on year during the period.
The figure is a key indicator for spending on real estate, infrastructure, equipment and machinery — sectors in which Beijing has sought to stimulate activity of late.
Investments specifically in property development, however, were down 9% year on year, the NBS said.
The property sector — long a vital growth engine for China’s economy — is now under unprecedented pressure, with several major developers on the verge of bankruptcy and falling prices dissuading investment in real estate.
The country’s urban unemployment rate rose slightly to 5.3% in January and February from 5.2% in December.
The figure was 14.6% for the 16-24 age bracket, according to a new criterion that excludes students, introduced after a record high was notched last year.
Beijing has set a target of 5% annual growth in gross domestic product (GDP) this year — among the slowest official goals in decades.
China’s economy emerged from deflation in February for the first time in six months.