What will drive a strong economic start in 2026? A comprehensive look at the first economic report card

How AI and Artificial Intelligence Drive Investment Growth in the Energy Industry

“Strong start and a good beginning.” At the March 16th State Council Information Office press conference, Fu Linghui, spokesperson for the National Bureau of Statistics, commented on China’s economic performance in January and February this year.

Data shows that in the first two months, indicators in foreign trade, consumption, production, and new driving forces have all significantly rebounded.

From January to February, the country’s fixed asset investment (excluding rural households) was about 5.27 trillion yuan, a year-on-year increase of 1.8%, reversing last year’s decline of 3.8%. China’s import and export of goods grew by 18.3% year-on-year, accelerating by 13.4 percentage points compared to December last year. Total retail sales of consumer goods increased by 2.8% year-on-year, up 1.9 percentage points from December.

Fu Linghui stated that moving forward, the focus will be on maintaining stability while seeking progress, implementing more proactive macro policies, developing new quality productivity according to local conditions, and focusing on stabilizing employment, enterprises, markets, and expectations.

Fixed Asset Investment Rebounds, AI and Computing Power Drive Energy Industry Development

Since the beginning of this year, the international environment has been volatile, with increased spillover risks from geopolitical conflicts, yet China’s economy still achieved a “good start,” with significant rebounds in investment and new driving forces.

In January and February, the added value of industrial enterprises above designated size increased by 6.3% year-on-year, accelerating by 1.1 percentage points from December last year. Fu Linghui said that the growth mainly stems from improved domestic demand, strengthened export pull, and the effects of macro policies.

Among these, growth in equipment manufacturing has made a particularly notable contribution to industrial growth. The added value of equipment manufacturing increased by 9.3% in January and February, accounting for 47.4% of the total growth of large-scale industrial enterprises.

Demand expansion has become one of the highlights of the macro economy in the first two months. Fixed asset investment increased by 1.8% year-on-year, reversing last year’s 3.8% decline. Specifically, infrastructure investment grew by 11.4%, accelerating by 10.8 percentage points from the previous year, contributing 3 percentage points to investment growth; high-tech industry investment increased by 5.1%, with aerospace equipment manufacturing and information services growing by 20.2% and 16.5%, respectively; investment in power, heat production, and supply increased by 13.1%.

The “good start” of the economy in 2026 is not only due to traditional demand and investment recovery but also driven by new momentum.

In January and February, the added value of computer, communication, and other electronic equipment manufacturing increased by 14.2% year-on-year. Meanwhile, rapid growth in the electronics industry has boosted upstream raw materials sectors, especially the chemical industry, with the added value of chemical raw materials and chemical products manufacturing increasing by 7.6%.

Additionally, the development of AI and increased demand for computing power have driven the upstream energy sector. In January and February, the added value of power, heat production, and supply increased by 5.1% year-on-year, accelerating by 4 percentage points from December last year.

Service Consumption Grows Faster Than Goods Consumption, Data Reveals Consumption Upgrade Trend

At the State Council Information Office press conference, the initial consumption situation and future consumption trends became a major focus for media.

Fu Linghui said that when observing consumption, it is important not only to look at total retail sales of consumer goods but also at service retail sales. “Since the beginning of this year, under the influence of consumption-promoting policies and the extended Spring Festival holiday, market sales have rebounded significantly, service consumption potential has been unleashed, and new consumption drivers have strengthened.”

Beike Finance reporters noted that since the start of the year, the growth rate of service consumption has outpaced that of goods consumption, with some indicators reaching new highs.

In January and February, service retail sales increased by 5.6% year-on-year, slightly faster than the previous year’s full-year growth of 5.5%. Notably, retail sales of tourism, consulting, leasing services, and cultural and leisure services all maintained rapid growth exceeding 10%.

During the Spring Festival, nearly 600 million domestic trips were made, with total travel expenses exceeding 800 billion yuan, both hitting record highs. At the same time, the expansion of visa-free policies for inbound travelers has increased inbound tourism, further boosting domestic market sales.

On the goods side, consumption upgrading remains a highlight. In January and February, China’s total retail sales of consumer goods increased by 2.8% year-on-year, accelerating by 1.1 percentage points from the fourth quarter of last year.

Among these, in the first two months, retail sales of grain, oil, food, clothing, shoes, hats, and textiles increased by 10.2% and 10.4%, respectively.

Fu Linghui explained that the rapid growth in basic living goods is mainly due to residents’ increased demand for higher quality and higher-grade products. While total food consumption remains limited, the sales growth is driven more by the expanding demand for green and healthy foods.

In addition, in the first two months, retail sales of gold, silver, and jewelry increased by 13% year-on-year; communication equipment retail sales grew by 17.8%; and household appliances and audiovisual equipment increased by 3.3%.

“Among household appliances and audiovisual products, high-efficiency products with higher energy ratings maintained double-digit growth, indicating that demand for green products is expanding,” said Fu Linghui.

It is worth noting that this year, the National Bureau of Statistics introduced a new indicator: “Online retail sales of goods and services,” replacing the previous “online retail sales” indicator.

Fu Linghui explained that the new indicator, “Online retail sales of goods and services,” is an optimized improvement over the original, mainly expanding the scope of online service platform statistics and strengthening the measurement of online service retail.

In the first two months, online retail sales of goods and services increased by 9.2% year-on-year, significantly faster than the growth of total retail sales of consumer goods. Specifically, online goods retail sales grew by 10.3%, and online service retail sales increased by 7.3%. Meanwhile, transactions on short-form online video platforms increased by over 30%.

Fu Linghui believes that the continued upgrading of residents’ consumption structure and the growth of new consumption drivers will remain key factors for sustained consumption growth. A series of policies to promote consumption will further support this trend, and consumer spending is expected to continue steady growth.

Foreign Trade Surpasses Expectations, Import Rebound Outpaces Export

At the March 16th State Council Information Office press conference, Fu Linghui also stated, “The foreign trade data at the start of the year exceeded expectations, and this year’s foreign trade development is very promising.”

In the first two months, the total import and export of goods was about 7.7 trillion yuan, an increase of 18.3% year-on-year, accelerating by 13.4 percentage points from December last year. Among these, exports grew by 19.2%, up 13.1 percentage points from the previous year; imports increased by 17.1%, accelerating by 16.6 percentage points.

Fu Linghui pointed out that China’s import rebound is higher than exports, reflecting not only the improvement in domestic demand driving imports but also creating new opportunities for global trade development.

On the export side, highlights include the continuous expansion of China’s “trade circle” and the improvement in export product competitiveness.

In the first two months, China’s import and export with ASEAN and the EU increased by 20.3% and 19.9%, respectively, with trade with Belt and Road countries also growing by 20%. Meanwhile, exports of electromechanical and high-tech products grew rapidly, boosting foreign trade. In January and February, exports of electromechanical products increased by 24.3%, and high-tech product exports grew by 24.2%. High-tech products like integrated circuits and ships showed strong growth.

At the State Council Information Office, Fu Linghui further emphasized several important factors for understanding foreign trade development. First, Chinese products are highly adaptable to foreign demand in terms of quality and standards; second, China offers high-quality supply, not only in product competitiveness but also in stable supply capabilities; third, China’s foreign trade development is based on mutual benefit and win-win cooperation, providing high-quality products globally while actively expanding imports.

Beijing News Beike Finance Reporter: Pan Yichun; Editor: Chen Li; Proofreader: Mu Xiangtang