China’s consumers increased their spending by 3.5 percent in this year’s first two months, the country’s statistics agency reported, as China emerged from three years of draconian anti-COVID lockdown mandates.
Those mandates had limited the economy to 3-percent growth last year, one of the worst years since the 1970s, according to The Wall Street Journal.
The new figure contrasts with a 1.8-percent contraction in retail spending in December.
Consumers’ return to stores and services helped to offset the slump in factory orders from foreign customers, the WSJ said.
Factory production gained 2.4 percent during January and February.
Although that bested December’s 1.3 percent, the rate of increase was still below China’s historical standard.
The country’s factories have been slowed by higher interest rates abroad, retailers’ overstock in the U.S., and the global economic slowdown and general uncertainty.
Investment in fixed assets such as machinery grew 5.5 percent in this year’s first two months, the statistics agency reported.
Job growth has remained slow, a sign that the government may need to offer more supports to the economy if China is to reach its 5-percent growth target this year, the WSJ said.
TREND FORECAST: China will need a year or longer to fully restart its economy after emerging from three years of draconian zero-COVID mandates and lockdowns.
China’s rebound will be slowed by persistent inflation that is discouraging consumers from spending as well as an economic global slowdown that will hit its export market sector. In turn, the reduction in China’s factory output below historical standards will signal to the world lower levels of growth this year.