Economy hints recovery, but challenges persist

China's economy continued its recovery in the first two months, but challenges remain, including tariffs and insufficient demand. To sustain growth and achieve high-quality economic development, well-coordinated and effective policies are needed to boost consumption.

Since the beginning of the year, China has seen steady growth in production, supply, consumption and investment. First-quarter GDP growth is projected to reach around 5.5 percent year-on-year, despite headwinds such as fewer working days in the first two months and the earlier-than-usual arrival of the Spring Festival holiday.

The industrial added value of major enterprises rose 5.9 percent year-on-year in the first two months, 0.1 percentage point higher than the full-year 2024 growth rate. The services sector output index grew 5.6 percent, accelerating by 0.4 percentage point from last year's annual figure.