China's growth surprise
China kicked off 2026 with a stronger-than-expected rebound — industrial output surged 6.3% year-on-year and retail and investment beat forecasts, data showed this week reported. Economists caution the upswing is fragile: a deep property slump and spillovers from the Middle East conflict could still dent exports and push inflation expectations higher argued reported.
China’s exports jumped 21.8% in January–February, pushing the two‑month trade surplus to about $213.6 billion. (cnbc.com) Fixed‑asset investment rose 1.8% in the January–February period, driven by an 11.4% surge in infrastructure spending. (tradingeconomics.com) Investment in real‑estate development contracted 11.1% in the same two months, extending a deep slump after a 17.2% drop in 2025. (investinglive.com) Retail sales grew 2.8% in January–February—the biggest gain since October—bolstered by Lunar New Year holiday spending. (scmp.com) The export strength was concentrated in semiconductors, autos and electronics, which customs data flagged as key drivers of outbound shipments. (abcnews.com) At the same time, shipments to the U.S. fell roughly 11% even as demand from ASEAN and the EU rose, shifting China’s trade destinations. (abcnews.com) Crude oil jumped above $100 a barrel after strikes around Iran, a move that raises input costs for manufacturing and transport. (cnbc.com) Major carriers including Maersk and CMA CGM suspended transits through the Strait of Hormuz and rerouted ships via the Cape of Good Hope, increasing freight costs and voyage times. (cnbc.com) At the Two Sessions in early March, Beijing set a 2026 GDP target of 4.5–5% and an inflation goal of about 2%, signaling tolerance for slower but steadier growth while policymakers lean on infrastructure support. (english.www.gov.cn)
