Mixed signals from China

While the retail sales data announced in China indicated a recovery in the economy, the industrial production data was disappointing. Although the Chinese economy recovered in the first two months of 2023 following the lifting of Covid restrictions, the failure of industrial production to meet expectations showed that the recovery was unbalanced. Retail sales in the country increased by 3.5 percent in January-February compared to the same period of the previous year, in line with expectations. Retail sales had decreased by 1.8 percent in December. Industrial production, on the other hand, increased by 2.4 percent annually in the same period, below expectations of 2.6 percent. The unemployment rate exceeded expectations of 5.3 percent at 5.6 percent. Fixed asset investments, which were estimated to have increased by 4.5 percent, presented a strong picture with a 5.5 percent increase.