China’s Industrial Production, Retail Sales Rebound

China’s industrial production and retail sales rebounded in January to February, reflecting a strong recovery from the pandemic driven downturn, figures from the National Bureau of Statistics showed Monday.

Industrial production climbed 35.1 percent year-on-year in January to February period, faster than the 7.3 percent growth seen in December. This was also bigger than the expected rate of 30 percent.

Likewise, retail sales growth accelerated to 33.8 percent from 4.6 percent in December. Sales were forecast to gain 32 percent.

In January to February, fixed asset investment grew 35 percent from the same period last year. Economists had forecast a faster expansion of 40 percent.

The surveyed unemployment rate came in at 5.5 percent in February, up from 5.2 percent in December.

This set of data shows the Chinese economy is recovering from Covid, especially in terms of consumption, Iris Pang, an economist at ING said.

But the very low base also masked the degree to which these strong figures are driven by underlying growth, the economist added. These low base-effects could last until April as economic activity started to pick up in May last year.

Activity is expected to remain strong in the near-term, as the easing of virus restrictions boosts consumption and fiscal stimulus among key trading partners should keep exports strong, Julian Evans-Pritchard, an economist at Capital Economics. Further ahead, however, momentum will soften.

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