China’s recent economic data shows retail sales up 4% in January-February and industrial output rising 5.9%. Despite these positive figures, investor sentiment remains low, reflected in a slight decline in stock prices. The government plans to enhance domestic demand through increased household income and spending.

Recent figures released by China’s National Bureau of Statistics indicate notable economic activity as retail sales increased by 4% in January-February, outperforming analyst expectations. Additionally, industrial output rose by 5.9%, surpassing median estimates from a Bloomberg survey. Fixed-asset investment grew by 4.1%, aligning with the highest growth since early 2024, suggesting resilience amid external pressures from US tariffs.

Despite these positive indicators, investor sentiment remained tepid, reflected in the narrow trading range of Chinese stocks. The benchmark CSI 300 Index concluded the day 0.2% lower, while 10-year bond yields rose by seven basis points to 1.895%. Furthermore, futures contracts on 30-year debt exhibited significant declines, marking one of the worst trading days of 2025 thus far.

These statistics present a broader view of the impact of trade tensions initiated during Donald Trump’s presidency. An expansion of subsidy programs aimed at assisting consumers and businesses with older equipment has been effective in stimulating demand. Additionally, a proactive approach by exporters has contributed positively to manufacturing output.

During a recent press conference in Beijing, a deputy of China’s primary economic planning agency outlined forthcoming measures to boost domestic demand. He emphasized that the plan hinges on increasing household income and enhancing consumer spending capabilities, suggesting a strategic pivot towards internal growth amidst foreign trade vulnerabilities.

In summary, China has reported encouraging economic growth figures, with significant rises in retail sales, industrial output, and fixed-asset investments. However, these positive developments have not sufficiently boosted investor confidence, as reflected in stock and bond market performances. Moving forward, China is focusing on policies that aim to enhance domestic consumption and income, indicating a strategic shift to bolster its economy against external trade challenges.

Original Source: m.economictimes.com

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