According to economists surveyed by Bloomberg, China’s retail sales growth in the first two months of 2026 may slow to about 2.1%, the lowest on record outside the Covid-19 outbreak period. The forecast suggests domestic demand remains weak despite the government's efforts to boost consumption. Commenting on the survey results, SMU Associate Professor of Finance Fu Fangjian said the slowdown may partly reflect a high comparison base last year, as well as the earlier “trade-in” consumption stimulus that temporarily boosted demand. He noted that such subsidies can concentrate consumption in the short term but may also bring forward spending, potentially dampening demand later. Assoc Prof Fu added that long-term consumption weakness is linked to structural factors, including cultural saving habits, uneven income distribution, demographic changes and the incomplete recovery of China’s property market. He pointed out that the report placed greater emphasis on people's livelihood and there is much to be done there, before analysing and optimising policies.
