China has set an annual GDP growth target of 5% this year (Shutterstock)

Official data showed - today, Monday - that the performance of the Chinese economy in the first two months of 2024 was mixed, with sluggish consumption accompanied by an increase in industrial production, which reflects an uneven recovery.

The expected recovery after the authorities lifted strict Covid restrictions in late 2022 was weaker than expected, as the world's second-largest economic power tried to deal with turmoil in the real estate sector, high unemployment rates among young people, and sluggish consumption.

Last January and February, retail sales, which are a key indicator of household consumption, rose by 5.5% year-on-year, according to the Chinese National Bureau of Statistics.

But the number recorded in the past two months declined compared to last December, which witnessed an increase of 7.4%, and it was also somewhat lower than the result estimated by a poll conducted by Bloomberg of the opinions of analysts who expected an increase of 5.6%.

The recorded data period included the Lunar New Year holiday, which is important in China, and this year it fell at the beginning of last February, and usually leads to an increase in consumption during the weeks preceding it.

Meanwhile, industrial production rose by 7% in the past two months, according to the National Bureau of Statistics, exceeding the 6.8% rise recorded in December, and the 5.2% that Bloomberg expected.

China usually publishes data for the first two months of the year together, due to the Lunar New Year holiday.

 Real estate sector

Fixed asset investment rose 4.2% during this same period.

This figure is a key indicator of spending on real estate, infrastructure, equipment and machinery, sectors in which Beijing has sought to stimulate activity recently.

The Bureau of Statistics reported that investments in real estate development declined by 9% during the same period.

The real estate sector - which has always been a vital engine of growth in the Chinese economy - is under unprecedented pressure, at a time when many major real estate development companies are on the verge of bankruptcy, and at a time when falling prices discourage customers from investing in real estate.

The unemployment rate in urban areas of the country rose to 5.3% during the past two months, compared to 5.2% the month before.

Beijing has set a target for annual growth in gross domestic product of 5% this year, which is among the slowest official targets in decades.

The Chinese economy emerged from recession last February, for the first time in 6 months.

China's chief economic planner, Cheng Changhe, highlighted the main indicators, noting that:

  • China's exports rose by about 10% in the first two months of the year.

  • Medium and long-term bank loans increased by more than 30%.

Source: Al Jazeera + French