Economic Performance - In January-February 2026, industrial added value increased by 6.3% year-on-year, up from 5.2% in December 2025, primarily driven by exports[5] - Fixed asset investment (FAI) rose by 1.8% year-on-year in January-February 2026, a significant recovery from -15.1% in December 2025, with infrastructure investment at 11.4% and manufacturing investment at 3.1%[5][29] - Real estate investment decreased by 11.1% year-on-year in January-February 2026, but the decline narrowed by 6.1 percentage points compared to the entire year of 2025, aligning with seasonal trends[5][36] Consumer Behavior - Retail sales (social zero) grew by 2.8% year-on-year in January-February 2026, compared to 0.9% in December 2025, supported by the Spring Festival and post-real estate cycle consumption[5][20] - Categories such as home appliances and furniture saw significant year-on-year growth, with beverage retail sales increasing by 6.0% and food categories by 10.2%[27][20] Policy Outlook - The GDP growth rate for the first quarter is projected at 5.2%, indicating that achieving the annual growth target of 4.5%-5% is feasible with lower average growth rates required in subsequent quarters[42] - The likelihood of new incremental policies being introduced in the short term is low due to reduced growth pressure[42] Risks - Potential risks include domestic policy effectiveness falling short of expectations, unexpected changes in international geopolitical situations, and measurement errors in data[44]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The strong economic data from January to February was the result of multiple factors such as the late Spring Festival, the demand for investment to stop falling and stabilize, and the strength of new industries and new consumption. There are still obvious signs of impulse, and there are still structural concerns in the economy. The fiscal increment this year is low, there is high uncertainty in the fundamentals, the overdraft of the second - quarter data by the first - quarter impulse cannot be ignored, and the data sustainability is weak [2]. - Since 2023, the downward trend of interest rates in the second quarter has been more obvious. The upper limit of the 10 - year Treasury bond yield is maintained at 1.85%, and the upper limit of the 30 - year Treasury bond yield is 2.3%. The current yield has reached this level, but fluctuations are inevitable. Allocation portfolios can start to extend duration, while trading portfolios need to wait. It is recommended to focus on medium - and short - term durations and make early arrangements by the end of March [2]. Summary by Directory 1. Why were the economic data better than expected? - **Reasons for better - than - expected data**: The late Spring Festival led to less impact on economic activities in January and February. The policy - level demand for investment to stop falling and stabilize was strong, with policy - based financial instruments from the fourth quarter of last year taking effect in early 2026. New industries and new consumption played a significant driving role [6]. - **Industrial added value exceeded seasonality**: Exports were better than expected, with the export delivery value and industrial added value showing a positive correlation. High - tech manufacturing continued to drive growth, with a 13.1% year - on - year increase from January to February, a new high since April 2022. However, traditional heavy industries and durable consumer goods had weak momentum [7][8]. - **Real estate and infrastructure exceeded expectations**: Fixed - asset investment turned positive, with infrastructure, real estate, and manufacturing investment all rising. Construction and installation investment turned positive year - on - year, and equipment purchase maintained a high growth rate. The month - on - month increase in fixed - asset investment in January and February may be mainly driven by new projects [10]. - **Retail sales of consumer goods rebounded from a low level**: The adjustment of the retail sales of consumer goods (社零) caliber ended, and the year - on - year growth rate rebounded. The month - on - month growth of commodity retail and catering revenue was higher than the seasonal level. The industry was mainly affected by policies, the Spring Festival, and the rise in gold prices [15]. 2. How to view the subsequent economic trend? - **Fiscal uncertainty**: There was no significant increase in the fiscal volume announced during the Two Sessions this year compared to last year. Without a full economic recovery, there is high uncertainty at the macro - level. High - frequency data shows that there may be a shortage of physical work volume [18]. - **Seasonal decline in the second quarter**: Since 2023, the impulse in the first quarter has been more obvious, and the second - quarter decline beyond the seasonal level seems inevitable [22]. - **Accelerated debt resolution**: The issuance of special refinancing bonds has been slow since the beginning of the year, but debt resolution is still one of the main tasks of local governments. The debt - resolution progress may accelerate in the second and third quarters, and the investment and construction growth rate will slow down [22].