The start of the year has seen investment continuously release positive signals. Highly anticipated economic data for the beginning of the year is about to be unveiled. The National Bureau of Statistics will release key macroeconomic indicators for January and February on March 16, including industrial added value, fixed-asset investment, and total retail sales of consumer goods. The government work report set this year's economic growth target at 4.5% to 5%, emphasizing the pursuit of better outcomes in practical work. Concurrently, a series of pragmatic and effective measures to stabilize growth have been introduced, significantly boosting market confidence. The March "CBN Chief Economists Confidence Index," released by the First Financial Research Institute, stood at 50.5, higher than the previous month and marking the eighth consecutive month above the 50-point expansion-contraction threshold. Economists believe the National People's Congress sessions conveyed strong signals of more proactive and vigorous macroeconomic policies, suggesting the Chinese economy is expected to maintain a trend of stable progress with quality and efficiency improvements.

The Spring Festival holiday impacted industrial production. The consensus forecast from a First Financial chief economists survey indicates an average predicted year-on-year growth rate of 5.3% for industrial added value in January-February. Looking at leading indicators, the official Manufacturing Purchasing Managers' Index (PMI) for February was 49.0%, down 0.3 percentage points from the previous month. The Non-Manufacturing Business Activity Index was 49.5%, up 0.1 percentage points, while the Composite PMI Output Index was 49.5%, down 0.3 percentage points. Zhang Liqun, a special analyst for the China Federation of Logistics & Purchasing, stated that the continued decline in the February manufacturing PMI reflects both the impact of the Spring Festival and indicates persistent downward pressure on the economy. All order sub-indices remained below the 50-mark and declined further, with the new export orders index showing a significant drop.

Analyzing from the production side, Zhao Wei, Chief Economist at Shenwan Hongyuan Securities, noted varying degrees of improvement across upstream, midstream, and downstream industries in the first two months, with production sentiment better than levels seen in late December 2025. Historically, indicators like the blast furnace operating rate, PTA operating rate, and highway freight volume correlate well with year-on-year industrial added value growth. In January-February, the year-on-year blast furnace operating rate, PTA operating rate, and highway truck traffic volume all increased by 2 to 4 percentage points. Other auxiliary indicators, such as the year-on-year average daily coal consumption by six major power generation groups, railway freight volume, and the operating rate of automobile semi-steel tires, also showed varying degrees of improvement.

Conversely, Lu Ting, Chief China Economist at Nomura, forecasts that the year-on-year growth rate of industrial added value for January-February will decline to 4.5%. He attributes the slowdown primarily to fewer working days and a drop in automobile sales. Due to the extended Spring Festival holiday, there were 37 working days in January-February, one day less than the same period in 2025. Su Jian, Professor at the School of Economics, Peking University and Director of the National Economic Research Center, also suggested that despite expansion in high-tech manufacturing, strong exports, and policy effectiveness, factors such as contraction in general manufacturing, a sluggish real estate market, and declining investment lead to an expectation of 4.8% year-on-year growth for China's industrial added value of major enterprises in January-February 2026, a deceleration of 1.1 percentage points compared to the same period last year.

Consumer demand is accelerating. The average forecast from economists surveyed by First Financial for the year-on-year growth rate of total retail sales of consumer goods in January-February is 2.4%. China experienced its "longest ever" Spring Festival holiday this year. CITIC Securities anticipates retail sales growth of approximately 2.2% for the first two months. The first tranche of 2026's 62.5 billion yuan in ultra-long-term special treasury bond funds supporting trade-in programs was allocated before New Year's Day, with the policy initiation timing moved forward. Consumption performance in relevant subsidized categories has shown signs of recovery, aiding the restoration of consumer momentum in January-February. Wen Bin, Chief Economist at China Minsheng Bank, believes that since the start of the year, the orderly rollout of various consumption promotion activities, combined with the ongoing effects of the trade-in policy, has accelerated the release of consumer replacement demand, leading to growth in the consumer market. He forecasts growth of around 2.5%, higher than the 0.9% recorded in December last year. Analyzing by sector, he noted that consumer-facing services such as retail, accommodation & catering, and culture & entertainment performed well, with their business activity indices rising to varying degrees compared to the previous month. Regarding key goods, supported trade-in categories grew relatively fast, and consecutive increases in domestic refined oil prices are expected to narrow the decline in consumption of petroleum and related products. However, automobile sales dropped significantly after the expiration of the purchase tax exemption, and weak commercial housing sales will pressure housing-related consumption. Data disclosed on March 1st by the China Association of Automobile Manufacturers showed that domestic automobile sales in the first two months of 2026 fell 23.1% year-on-year to 2.799 million units. This included 1.126 million new energy vehicles and 1.673 million fuel-powered vehicles, down 27.5% and 19.8% year-on-year, respectively. CAAM attributed the decline in auto market vitality to multiple factors, including policy transition adjustments, front-loaded demand release, the Spring Festival holiday, insufficient consumption willingness, and a high base from the same period last year.

Efforts are underway to stabilize and reverse the decline in investment. The average forecast from economists participating in the First Financial survey for the growth rate of fixed-asset investment in January-February is -3.2%. Lu Zhengwei, Chief Economist at Industrial Bank, stated that fixed-asset investment in recent years typically shows a pattern of being stronger early in the year and weaker later, suggesting the initial reading might see a seasonal rebound. Breaking down the three major areas, Lu analyzed that for infrastructure investment, the accelerated issuance pace of new special bonds since the start of 2026, coupled with support from policy financial tools in the fourth quarter of 2025, might mean relatively sufficient funding for infrastructure investment early in 2026. However, a potential shortage of viable projects persists, as evidenced by the year-on-year contraction in new contract values for China State Construction Engineering Corporation's infrastructure segment in January 2026. Regarding real estate investment, Lu noted that the decline in new home sales area in 30 major cities narrowed slightly to 24.7% in January-February, but land transactions remained sluggish, suggesting real estate investment growth will likely remain under pressure. For manufacturing investment, the impact of "anti-involution" policies on investment may persist, while recovering corporate profit growth and the early allocation of equipment renewal funds are expected to support manufacturing investment, potentially leading to marginal improvement at the start of 2026. Lu Ting believes that despite strong government bond issuance in the first two months, the supportive effect might be limited, and construction conditions during winter, particularly in northern regions, constrain infrastructure investment growth. The continued sharp decline in real estate investment remains the primary drag on overall investment.

The Central Economic Work Conference explicitly called for "stabilizing investment and halting its decline." Since the beginning of the year, investment has continuously released positive signals. The government work report focuses on key areas like new quality productive forces, new urbanization, and comprehensive human development, aiming to enhance market-driven effective investment growth and increase the proportion of government investment in livelihood projects. Plans for 2026 include allocating 755 billion yuan in central budget内 investment and 800 billion yuan from ultra-long-term special treasury bonds for "dual key" projects, with differentiated increases in central government investment subsidy standards. Additionally, 800 billion yuan in new policy financial instruments will be issued to attract more private capital into investment. Zheng Shanjie, Minister of the National Development and Reform Commission, revealed that this year will see advancements in the "six network systems," comprehensive multi-dimensional transportation facilities, and key sectors like consumption, low-altitude economy, "AI+", and education/healthcare. Preliminary estimates suggest investment in these areas will exceed 7 trillion yuan in 2026. As the first year of the 15th Five-Year Plan period, planning and initiating a batch of major projects and significant engineering endeavors will provide momentum for effective investment. The draft outline for the 15th Five-Year Plan proposes 109 major engineering projects over the next five years. These projects balance immediate needs with long-term goals, involving both "hard" infrastructure and "soft" capacity building, and will emphasize leveraging government investment to attract broader societal participation, thereby maximizing the role of major projects in strengthening foundations, addressing weaknesses, and enhancing future potential.