China's Economy Beats Forecasts, Demand Still Lags

Industrial production rose 6.3% year-on-year in January–February, surpassing market forecasts of 5.0%, while retail sales increased 2.8% against expectations of 2.5%. Officials attributed this initial momentum to "new productive forces," including technological innovation and AI.

However, authorities cautioned that the recovery remains uneven, highlighting a persistent challenge of "strong supply but weak demand." Subdued household spending and business caution continue to weigh on the economy. While existing policy support measures are expected to bolster consumption throughout the year, officials acknowledged that additional government initiatives might be necessary to fully revive domestic demand.

This emphasis on consumption comes as the property sector struggles and global trade remains uncertain. Despite global volatility, China affirmed its energy supply capacity is sufficient.

The overall outlook suggests a steady growth trend, balancing initial positive data with structural demand-side challenges.