China's 2026 economy grew stronger than expected, boosted by AI demand and exports, but property slump and weak consumption persist.

China's economy showed stronger-than-expected growth in early 2026, with industrial output rising 6.3% year-on-year and retail sales increasing 2.8%, driven by AI-related demand and a prolonged Lunar New Year holiday. Fixed-asset investment grew 1.8%, defying forecasts, supported by infrastructure spending. However, the property sector remained in deep contraction, with investment down 11.1% and home sales dropping 13.5%. Domestic consumption remains weak, youth unemployment is high, and deflation persists, while exports surged 21.8% amid global tech demand. The urban jobless rate held at 5.3%, and policymakers have not introduced major new stimulus measures.