BEIJING, March 16 — Activity in China’s retail and industrial sectors picked up in the first two months of the year, official data showed today, as Beijing tries to revive domestic spending while navigating mounting external risks.

Leaders in the world’s second-largest economy have been pushing domestic consumption to drive growth as the once-booming property sector remains mired in a debt crisis.

Retail sales grew 2.8 per cent year-on-year in January and February combined, data from China’s National Bureau of Statistics showed, beating economists’ forecasts of 2.5 per cent in a Bloomberg survey.

China typically combines data for the first two months of the year to account for distortions caused by the shifting Lunar New Year holiday.

Industrial production rose 6.3 per cent during the same period, up from 5.2 per cent in December and above the 5.3 per cent forecast.

Fixed asset investment also returned to positive territory, rising 1.8 per cent.

“China’s activity data suggest that growth accelerated at the start of the year, driven by both strong exports and a pickup in domestic demand,” said Zhichun Huang of Capital Economics.

However, Huang warned that fiscal policy could offer less support this year compared with 2025, potentially weighing on growth later in the year.

The surveyed unemployment rate edged up to 5.3 per cent during the period — the highest since August.

Exports have provided a key boost to the economy as domestic activity weakened, surging again early this year.

But analysts cautioned that global developments could affect the outlook.

Zhiwei Zhang, president of Pinpoint Asset Management, said turmoil in the Middle East could pose risks, particularly as China imports about half of its seaborne crude from the region.

Meanwhile, Chinese President Xi Jinping and US President Donald Trump are expected to hold a summit in Beijing from March 31 to April 2, according to the White House, though Beijing has yet to confirm the plans.

Trump has also suggested the meeting could be delayed as he focuses on the war with Iran. — Reuters