Chinese economy gets off to solid start in 2026

China's economy has got off to a solid start in 2026, with major indicators delivering better-than-expected results in the first two months of the year, laying the foundation for achieving the annual growth target and opening the 15th Five-Year Plan (2026-30) period on a firm footing.

While the broader economy still faces challenges from an evolving external environment, rising geopolitical tensions and lingering structural pressures at home, officials, economists and global business leaders remain broadly optimistic about the outlook.

They pointed to the resilience of the manufacturing and export sectors and the prospect of a rebound in domestic demand, supported by a more proactive macroeconomic policy stance.

"Activity data surprised to the upside at the start of the year, driven by exports and industrial production," said Sheana Yue, a senior economist at British think tank Oxford Economics. "Retail sales also exceeded expectations on the back of festive spending. And export-linked manufacturing and policy-supported industrial upgrading continue to offset persistent weakness in property, private investment and goods consumption."

Data released by the National Bureau of Statistics on Monday showed that China's value-added industrial output grew 6.3 percent during the January-February period from a year earlier, after a 5.2 percent rise in December.

Yue noted that the outperformance likely reflects continued strength in high-tech manufacturing, including transportation equipment, electrical machinery and electronics manufacturing, which grew 13.1 percent year-on-year during the first two months, 6.8 percentage points higher than the overall growth in headline industrial production.

According to the NBS, retail sales, a key measurement of consumer spending, surged 2.8 percent year-on-year over the January-February period after a 0.9 percent rise in December. Fixed-asset investment increased 1.8 percent over the January-February period, compared with a 3.8 percent decline in 2025.

Addressing a news conference on Monday in Beijing, NBS spokesman Fu Linghui said that China's economic performance in the first two months of the year came in "better than market expectations", reflecting the strong vitality and resilience of the world's second-largest economy.

While acknowledging that domestic and external challenges remain intertwined and uncertainties persist, he said the fundamental conditions supporting China's long-term growth remain unchanged. "The economy is expected to maintain steady progress while improving in quality, supported by a strong start to economic activity, expanding demand, industrial upgrading and effective policy support."

Wen Bin, chief economist at China Minsheng Bank, said, "Based on the performance in the first two months, China's GDP growth during this period is expected to come in at around 5 percent, exceeding market expectations."

Wen said that growth this year may strengthen further as the year progresses, aided by a more proactive macro policy stance and base effects, with the possibility of expectations being outperformed.

Target 'fully achievable'

Looking forward, Sun Xuegong, director-general of the department of policy study and consultation at the Chinese Academy of Macroeconomic Research, said China's 2026 economic growth target of between 4.5 percent and 5 percent is "fully achievable".

He said that favorable conditions remain in place, including the rapid development of new quality productive forces, structural upgrading in traditional industries and faster expansion of the service sector. On the demand side, he expects steady consumption growth, a potential rebound in investment and resilient exports this year, supported by policy support.

Following China's robust economic performance and the positive signals from the recently concluded two sessions, global executives also expressed confidence in China's economic prospects, showing a dedicated commitment to the Chinese market.

Lin Chunmei, president and general manager at Corning Greater China, said: "As the first year of the 15th Five-Year Plan, 2026 sees China setting an economic growth target that is both stable and developmental, aligning with the core demand of foreign enterprises for development certainty and injecting firm confidence into Corning's deep development in China. Corning regards China as one of its most important strategic markets globally."

Based on its firm confidence in the potential of the Chinese market, the United States-based materials science company announced last year an additional investment of $500 million in China, which will be implemented in the first year of the 15th Five-Year Plan period.

"For multinational companies, China remains pivotal," said Denis Depoux, global managing director at German management consultancy Roland Berger. "It is not only as a big market, but increasingly as a source of innovation and competitiveness. It is an opportunity for MNCs to strengthen global competitiveness and turn the China challenge into a strategic advantage across the global operation."

Contact the writers at ouyangshijia@chinadaily.com.cn