Industrial production, fixed assets, retail sales data

Costco’s third store in mainland China will start trial operation in Pudong District, Shanghai on March 10, 2023.

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BEIJING — On Wednesday, China reported retail sales for the first two months of the year, only in line with expectations, while real estate investment slipped further.

Industrial production rose 2.4 percent in January-February, below the 2.6 percent expected in a Reuters poll.

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Retail sales rose 3.5%, in line with expectations. Most categories in retail sales rose, but sales of big-ticket items such as automobiles and appliances fell. In the first two months of this year, online retail sales of physical goods increased by 5.3% year-on-year.

Fixed-asset investment rose 5.5%, beating expectations for a 4.4% increase.

But within this category, real estate investment fell 5.7 percent in January and February from a year earlier. This follows a 10% drop in real estate investment for the whole of last year. Growth in infrastructure and manufacturing investment in the first two months of this year was slower than in 2022.

The urban unemployment rate rose to 5.6 percent in February, 0.1 percentage points higher than in January, the Bureau of Statistics said. The data showed that the unemployment rate for young people aged 16 to 24 remained high at 18.1%.

The release combined data for January and February – a practice by China’s statistics bureau – to avoid distortions caused by the Lunar New Year. The holiday is the biggest holiday of the year in China and marks a travel period of more than a month, which can fall on any month depending on the year.

The figures mark the first full month since China ended its strict containment of the novel coronavirus in early December.

Preliminary data and anecdotal evidence suggest tourism and eating out have rebounded, but Consumer spending remained tepid overall. At the same time, business surveys indicate Manufacturing activity surged.

“The external environment is more complicated, the problem of insufficient demand is still prominent, and the foundation for economic recovery is not yet solid,” China’s National Bureau of Statistics said in a release.

The bureau called for a boost to market confidence and a “reasonable increase in volume”.

Chinese authorities this month announced a growth target of around 5%, which is New Prime Minister Li Qiang warns country is not easy accomplish.

Guotai Junan’s Zhou Hao said the data reflected “a steady rather than accelerating momentum, which also indicates the need for strong policy support to unleash growth potential”.

This is breaking news. Please check for updates.

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