Yang Delong: China's national economic data significantly improved in January-February, and future policy measures are expected to be further intensified.

Today, the National Bureau of Statistics released the economic operation data for January–February 2026. As the first year of the 15th Five-Year Plan, major economic indicators showed a clear rebound at the start of the year, presenting a good beginning and several positive highlights.

In industrial production, growth accelerated, with equipment manufacturing and high-tech manufacturing performing well. From January to February, the added value of industrial enterprises above designated size increased by 6.3% year-on-year, 1.1 percentage points faster than December last year. On a month-on-month basis, the industrial added value grew by 0.83% in February.

In the service sector, rapid growth was achieved, with modern services developing quickly. From January to February, the national service production index increased by 5.2% year-on-year, 0.2 percentage points faster than December last year.

In the consumption field, the growth rate of total retail sales of consumer goods rebounded significantly. From January to February, total retail sales of consumer goods increased by 2.8% year-on-year, 1.9 percentage points faster than December last year. On a month-on-month basis, February saw an increase of 0.81%. This rebound was partly due to the Spring Festival holiday being extended by 1–2 days compared to last year, releasing more consumption demand; additionally, the late Spring Festival and relatively warm weather in northern regions facilitated travel and consumption. Notably, urban retail sales of consumer goods grew by 2.7% year-on-year, while rural retail sales grew by 3.2%, with rural growth significantly outpacing urban. This reflects increased returnees boosting rural consumption vitality, and the lower base in rural areas also contributed to higher year-on-year growth.

In fixed asset investment, the growth rate turned positive. From January to February, fixed asset investment increased by 1.8% year-on-year, compared to a decline of 3.8% for the whole of last year. Excluding real estate development investment, fixed asset investment grew by 5.2%. Private investment decreased by 2.6% year-on-year, with the decline narrowing by 4.8 percentage points compared to last year; after excluding real estate, private investment increased by 1%.

In import and export, rapid growth was achieved, with trade structure continuing to optimize. From January to February, total import and export value increased by 18.3% year-on-year, 13.4 percentage points faster than December last year. Exports grew by 19.2%, imports by 17.1%. Despite complex and volatile international circumstances, China’s import and export trade demonstrated strong resilience, with export products especially competitive, notably electromechanical products, which grew by 24.3%.

In terms of prices, there was a clear improvement. From January to February, the Consumer Price Index (CPI) rose by 0.8% year-on-year, with the increase expanding (0.2% in January and 1.3% in February). The Producer Price Index (PPI) decreased by 1.2% year-on-year, with the decline narrowing.

Overall, major economic indicators rebounded significantly in January–February, marking a good start for the national economy. However, it is also important to recognize that external environment changes are deepening, geopolitical risks are rising, and China still faces old problems and new challenges in economic development and transformation. Moving forward, efforts will be made to further strengthen policies to stabilize economic growth, adhere to the general principle of seeking progress while maintaining stability, implement more proactive macro policies, develop new productive forces according to local conditions, and focus on stabilizing employment, enterprises, markets, and expectations, to promote qualitative improvement and reasonable quantitative growth of the economy.

Under continued support of growth-stabilizing policies, this year’s economy is expected to improve comprehensively. The government work report set the 2026 GDP growth target at 4.5%–5%, with a CPI increase of about 2%. These targets are aligned with current economic conditions and are achievable with concerted efforts. Economic stabilization and data improvement will help further boost investor confidence.

Returning to the A-share market, March was initially expected to usher in a spring rally after the new year, but the outbreak of large-scale conflict in the Middle East disrupted the market rhythm. After the US attacked Iran, Iran retaliated strongly, nearly sealing off the Strait of Hormuz, which accounts for about 20% of global oil transportation. This caused international oil prices to spike to $119 per barrel (from about $73 before the conflict). The sharp rise in oil prices heightened inflation expectations, delaying the market’s expectation of a rate cut by the Federal Reserve this year, and some even expect no rate cuts this year. This impacted global stock markets.

As a result, the A-share market experienced significant volatility in March, with most stocks adjusting, except for sectors like oil and gas, chemicals, which rose sharply. Once the conflict eased, these sectors also saw notable corrections. Gold prices had already risen continuously and broke through $5,000 per ounce, accumulating profits. Although the conflict initially boosted safe-haven demand and pushed gold prices higher, the previous gains, inflation expectations, and delayed Fed rate cuts caused gold to retreat from its highs rather than continue rising. Currently, US President Trump has signaled the possibility of ending the war soon, and Iran and Israel have shown some retreat, making further escalation unlikely. The most panic phase has passed, and the market is expected to gradually return to its normal operation. The impact of this Middle East conflict on the A-share market is a short-term shock and will not end the current long-term slow bull market, which is supported by deep policy fundamentals and ongoing support for capital market development.

At this year’s National People’s Congress, CSRC Chairman Wu Qing stated that further reforms of the capital market will be deepened, with increased support for the ChiNext Board to back technological innovation enterprises, providing a green channel for their listing, and supporting the development of new productive forces. The “15th Five-Year Plan” was approved during the two sessions, and as the opening year, it emphasizes support for key technological directions—such as embodied intelligence, humanoid robots, chips and semiconductors, artificial intelligence, computing algorithms, solid-state batteries, commercial space, controlled nuclear fusion, and quantum technology—as well as related future industries, which will remain focal points for capital market attention. Despite recent resource stocks rising and attracting short-term funds, and some technological stocks experiencing adjustments, the market has stabilized and rebounded, and these technological innovation sectors will continue to be the main growth drivers, sustaining the tech bull run.

Since the emergence of large models like DeepSeek, China has achieved breakthroughs in high-end chips, large models, humanoid robots, and embodied intelligence, greatly enhancing global capital’s perception of China’s technological strength and reversing some previous pessimistic expectations. Two years ago, when I attended Warren Buffett’s annual shareholder meeting in the US and visited tech giants like Apple, Google, and Nvidia in Silicon Valley, ChatGPT had just launched and quickly surpassed 100 million users, but China was unable to participate in testing at that time. Many worried that in the era of rapid AI development, if China lagged in large model iterations, it could be ten years behind the US. The US attempted to keep China behind by restricting high-end chip exports and large model development, aiming to delay China’s AI progress by a decade. Now, that plan has failed. After the launch of products like DeepSeek, global capital’s view of China’s large models has changed completely. China’s development in high-end chips and large models has exceeded many foreign investors’ expectations. When I spoke with Nvidia executives last year, they said China’s large models are not lagging behind the US, and due to open-source approaches, enterprise costs are lower and support is easier. Recent data shows that China’s large model usage accounts for over 60% of the global total, with further increases expected.

In AI applications, China’s advantages are even more prominent. One of the best scenarios for AI + consumer applications is humanoid robots. During this year’s CCTV Spring Festival Gala, products from four robot companies appeared in sketches, martial arts performances, and micro-videos, leaving a deep impression. Some joked that the Gala’s director “filled the stage with robots.” However, the robot sector did not surge as expected after the festival, with many investors questioning whether current robot performances are heavily scripted and pre-programmed, and that truly autonomous work still requires technological breakthroughs. Currently, delivered robots mainly serve factories, shopping malls, hotels, and other scenes; truly entering thousands of households requires smarter “brains.” The core constraint is the intelligent brain, while hardware like balance and flexible arms is quite mature. I believe technological progress is unstoppable, and with large capital inflows, the bottleneck of the smart brain will gradually be broken through.

As Bill Gates said, people tend to overestimate the short-term performance of new technologies but underestimate their long-term impact. Humanoid robots are a perfect example: short-term expectations are often too high and lead to disappointment, but the long-term potential is enormous and currently underestimated. I firmly believe in the future of humanoid robots, which will become China’s fourth major industry sector after home appliances, smartphones, and new energy vehicles.

(Author: Chief Economist and Fund Manager at Qianhai Open Source Fund)