China’s economy shows mixed signals with steady retail growth, rising unemployment

By Tuba Ongun

China’s economy delivered mixed signals in the first two months of this year, as retail sales and industrial output showed resilience, while unemployment and the housing market posed concerns.

Retail sales rose by 4% year-on-year in the January-February period, up from December's 3.7% growth and in line with estimates, according to data released by the National Bureau of Statistics on Monday.

Industrial production grew at an annualized rate of 5.9% in the first two months of 2024, slightly down from December’s 6.2% growth but surpassing market forecasts.

The value added of equipment-making and high-tech manufacturing sectors gained momentum in January-February, rising 10.6% and 9.1%, respectively.

Fixed asset investment, excluding rural households, reached 5.3 trillion yuan ($727 billion), marking a 4.1% rise compared to the previous year. The data highlights continued efforts to strengthen infrastructure and industrial investment, even amid global uncertainties.

However, challenges persist. Urban unemployment climbed to 5.4% in February, the highest level in two years.

The property market, another critical pillar of the economy, remained under strain. New home prices fell by 4.8% year-on-year in February, a slight improvement from the 5.0% decline recorded in January, offering tentative signs of stabilization in the housing sector.