Retail sales in China surged 33.8 per cent in the first two months of this year – a rate faster than analysts expected and reflecting the diminished impact of the Covid-19 pandemic on the nation.

While the growth was from a low base given widespread lockdowns in Mainland China in the early months of last year, it suggests a degree of ‘revenge spending’ as consumers seek to resume more normal lives. 

China releases retail sales data for January and February in a combined figure so as to neutralise any impact from the timing of Lunar New Year. 

Referring to the low base of last year, China’s National Statistics Bureau said that even with that excluded “the growth of main indicators is stable and macro indicators are in a reasonable range”. 

Analysts had expected retail sales to rise by about 32 per cent. The higher increase followed a more modest 4.6 per cent growth rate in December and a 20.5-per-cent decline in January and February of last year. 

“We have a positive outlook for exports and manufacturing investment this year,” Louis Kuijs, head of Asia economics and Oxford Economics told Reuters. “And we expect household consumption to become a key driver of growth from Q2 onwards as confidence improves and the government’s call to reduce travel is toned down.”

China’s ability to contain the coronavirus pandemic before other major economies were able to do so has allowed it to rebound faster.

Liu Aihua, an NBS spokeswoman, warned that while positive factors for China’s economy are increasing, the foundation for the recovery is not yet solid.

“Covid-19 is still spreading around the world and global economic conditions are complex and severe; domestically the imbalances of the recovery are still quite obvious,” Liu told a briefing in Beijing.

• Additional reporting by Kevin Yao, Gabriel Crossley and Stella Qiu, of Reuters.