Retail sales accelerated and industrial production topped expectations over first two months of the year.
2 min
SINGAPORE—China reported surprisingly robust economic activity to start the year, giving Beijing some wind at its back as it faces the prospect of increased tensions with President Trump’s second administration.
Retail sales, a measure of consumer spending in China, accelerated, and investment and industrial production grew more than expected, though unemployment rose to a two-year high, and the beleaguered property market remained under pressure, according to official data.
The numbers come a day after Beijing released a policy plan to expand domestic consumption, including raising wages, increasing pensions and creating incentives for childbirth . The plan was the latest acknowledgment of the urgency in Beijing to find alternatives to export-led growth, but was light on specifics, such as whether new funding would be allocated to its policies, or how local governments would implement the proposed measures.
China earlier this month set an ambitious growth target of about 5% for 2025 and pledged to step up spending and boost domestic demand to stimulate a sluggish economy that is threatened by an escalating trade war with the U.S. The 5% growth target, unchanged from a year earlier, projected a sense of continuity as the Trump administration upends long-held assumptions about the global economic order .
In the two months since his return to office, Trump has put an additional 20% tariff on all Chinese goods and imposed an extra 25% duty on steel and aluminum imports.
China reported weaker-than-expected growth in the export sector to start 2025, which was a key engine of China’s economy last year—and which stands to take a hit as tariff barriers rise around the world. China also recently reported a drop in consumer prices for the first time in a year, a reflection of a larger disinflationary environment that has prompted Chinese leaders to call for more spending by households and businesses. Loans and credit data for February also came in below expectations.
On Monday, China said retail sales in the first two months of the year increased 4% from the same period a year earlier, up from December’s 3.7% year-over-year growth, according to figures published by China’s National Bureau of Statistics. China combines January and February data each year to iron out distortions brought by the shifting timing of the Lunar New Year holiday.
Chinese leaders have identified boosting domestic consumption as their top policy priority for 2025, a move that economists say has become critical as Trump administration tariffs hinder Beijing’s ability to rely on exports to boost growth.
China said industrial production in January and February rose 5.9% from a year earlier, more than economists’ expectations for a 5.4% increase but down from the 6.2% year-over-year gain in December.
Production of new energy vehicles, which includes electric vehicles, 3-D printing equipment and industrial robots jumped 48%, 30%, and 27% year-over-year, respectively, according to the data. Investment in buildings, equipment and other fixed assets rose 4.1% for the same period compared with a year prior.
The real-estate sector, a sore spot in China’s economy, continued to struggle. Property investment fell 9.8% year over year during the first two months of the year. New construction starts dropped by about 30% from the year prior.
Many economists say a sustained recovery in China’s property market is essential to repairing consumer sentiment and increasing spending, given how important real estate is to household wealth levels in the country.
China’s headline measure of joblessness, the urban unemployment rate, rose to 5.4% in February, its highest level since February 2023, up from 5.2% in January and 5.1% in December, according to the data. The metric isn’t seasonally adjusted.
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
Travellers are swapping traditional sightseeing for immersive experiences, with Africa emerging as a must-visit destination.
A survey of people with at least $1 million in investable assets found women in their 30s and 40s look nothing like older generations in terms of assets and priorities
New research suggests that bonuses make employees feel more like a mere cog in a wheel.
2 min
When it comes to rewarding workers financially, cash isn’t always king.
Companies frequently give employees monetary bonuses, but a new study suggests that paid vacation time is a perk employers should also consider.
The study’s authors say that while they didn’t explicitly look into whether employees prefer time off, the study found that receiving extra vacation time rather than bonus money makes workers feel less like a mere cog in a wheel and more like people who are recognised and valued as individuals with a life beyond work.
It makes them feel more human, in the researchers’ terms.
And that feeling benefits employers as well as employees, says Sanford DeVoe, a professor at the Anderson School of Management at the University of California, Los Angeles, and one of the study’s authors.
Feeling more human is strongly correlated with higher job satisfaction, greater engagement with work, better relationships with colleagues and less inclination to leave a job, he says.
In one experiment, the researchers asked about 1,500 participants to recall times when they received a monetary bonus or paid time off—all had received both—and how that made them feel.
Participants responded to the question on a 7-point scale, from feeling more like a robot on the low end of the scale to feeling more human on the high end. Monetary bonuses were given an average score of 5.04, compared with 5.4 for paid vacation time.
“While that difference may sound modest numerically, it represents a meaningful psychological shift,” says DeVoe. “It’s the difference between feeling neutral and feeling genuinely seen as a person.”
The authors then sought to better understand why paid vacation time made employees feel more human. In another experiment, about 500 participants were asked to imagine starting a new job where they might be awarded a bonus. Some were told the bonus would be an extra week of vacation, others were told it would be an extra week of pay.
Participants were then asked about their expectations for being able to keep their work and home lives separate in the new job. Those who could hope for a bonus of extra time off expected more separation between their work and personal lives than those whose potential bonus would be extra pay.
They also reported feeling more human on the 7-point scale. This suggested to the researchers that time off makes people feel more human because it creates a clearer psychological distance from work than a monetary bonus.
In a third experiment, the researchers further tested the idea that clear boundaries between work and personal lives were driving their results.
Two hundred participants were told to imagine being on a vacation and receiving two texts, including one from their mother. Half were told the second text was from a friend and half were told the second text was from their boss.
The authors then measured how human participants felt after each scenario. The average score for those receiving a text from a friend was 5.4 on the 7-point scale, compared with 4.16 for those receiving a text from the boss.
The difference in the scores “demonstrates that even minimal work intrusions can undo the psychological benefits of time off,” says DeVoe. “It shows that it’s not just time away that matters—it’s whether work actually lets go.”
All of this is important for employers looking to get the most out of their workers, he says. “For managers concerned with sustainable productivity, giving people uninterrupted time away from work can be a powerful lever.”
