China's Economy Off to Strong 2026 Start with Key Gains

China's economy demonstrated a robust start to 2026, with industrial output, retail sales, and fixed-asset investment all showing gains in the first two months of the year, according to data released by the National Bureau of Statistics. The figures, which combine January and February to account for distortions from the Lunar New Year holiday, exceeded analyst expectations and provided early encouragement for policymakers amid persistent domestic challenges and rising global uncertainties.

Industrial production grew 6.3 percent year-on-year, accelerating from 5.2 percent in December 2025 and marking the fastest expansion since September of that year. The uptick was fueled by a surge in exports, which rose 21.8 percent in the period, driven by strong global demand for artificial intelligence-related technology and supporting manufacturing supply chains. Retail sales increased 2.8 percent, the largest gain since October 2025 and above the 2.5 percent forecast from economists. The improvement partly reflected heightened tourism spending during the extended holiday in February, which boosted total expenditures by nearly 19 percent from the previous year, though per-trip spending...