Exclusive Interview丨Decoding China’s Q1 Economic Performance in the First Year of the 15th Five-Year Plan

Editor’s Note: Recent data indicate that China’s economy got off to a solid start in the first quarter of 2026. GDP grew 5% year on year, up 0.5 percentage points from the fourth quarter of last year. Both production and supply continued to grow at a relatively rapid pace, while domestic demand showed an overall improvement. Market prices rose moderately, and further headway was made in advancing innovative and high-quality development. In light of this sound performance, Qiushi reporters conducted an exclusive interview with two spokespeople from the National Bureau of Statistics. They reviewed China’s Q1 economic performance, offered insights on key issues concerning the economy and people’s wellbeing, and discussed the economic outlook for the period ahead.

Reporter: 2026 marks the opening year of the 15th Five-Year Plan (2026–2030), and the first quarter serves as an indicator for the economy’s performance over the year as a whole. How would you evaluate China’s economic situation in the first quarter?

Spokesperson: Since the beginning of this year, the global landscape has undergone profound and complex changes, leading to growing instability and uncertainty. In the face of this challenging situation, different regions and central departments across China have, under the strong leadership of the CPC Central Committee, taken proactive measures, adopted more effective macro policies to improve employment, business operations, market activities, and development expectations, and accelerated efforts to cultivate new quality productive forces. As a result, China’s economy has withstood downward pressure and staged a notable rebound. With the advancement of innovative and high-quality development, the country has made a sound start in the first quarter of the 15th Five-Year Plan period.

Economic growth has picked up, showing remarkable resilience. In the first quarter, despite heightened turbulence in the international landscape, ongoing domestic structural adjustments, and a relatively high base from the previous year, China’s GDP grew 5% year on year, up 0.5 percentage points from last year’s fourth quarter. This growth rate is set to be one of the highest among the world’s major economies. Notable improvements have been registered on both the supply and demand sides. Growth in industrial value added and total retail sales of consumer goods accelerated by 1.1 and 0.7 percentage points, respectively. Quarterly growth in total imports and exports reached a five-year high, while fixed-asset investment growth returned to positive territory. These achievements, against the backdrop of a complex environment, stand as a vivid testament to China’s strong economic resilience.

The economy has moved forward in spite of headwinds, making its steady performance all the more impressive. In the first quarter, the external environment became increasingly volatile and complex. Geopolitical conflicts produced broader spillover effects, and the risk of stagflation in the global economy increased. Most notably, the sharp rise in international energy prices since March has exerted a greater impact on domestic markets, adding to the difficulty of keeping the economy on an even keel. In response to these external changes, China has adapted effectively as circumstances evolved. Leveraging synergy between existing and newly introduced policies, it has ensured stable and orderly supplies of energy and resources through measures such as stabilizing production and diversifying imports, while also promptly introducing temporary price control policies. These steps have safeguarded both economic operations and ensured people’s needs were met. By comparison, some countries have experienced sharp price increases due to oil and gas supply shortages, severely disrupting production and daily life. The contrast between China’s economic stability and the international turbulence further underscores the importance of stability in economic fundamentals.

Workers install immersed pipes at a construction site for the Luoma Lake water source project in Suqian City, Jiangsu Province, February 3, 2026. During the first quarter of the year, all localities redoubled efforts to shore up areas of weakness and increased spending on projects to improve public wellbeing. PEOPLE’S DAILY / PHOTO BY CHEN SHAOSHUAI

The economy has continued to evolve and improve, with new growth drivers gaining momentum. In the first quarter, the value added of industrial enterprises above designated size in digital product manufacturing grew 11.2% year on year. The value added of AI-related sectors, such as integrated circuit manufacturing, surged by 49.4%, while intelligent unmanned aerial vehicle manufacturing posted value-added growth of 25.7%. The new energy sector also maintained solid growth, with the output of lithium-ion batteries and wind turbines rising by 40.8% and 30.1%, respectively. New economic sectors and growth drivers are increasingly becoming key forces driving high-quality development, and the economy’s transition toward innovation-driven, intelligent, and green development is now much more apparent.

The economy has been upgraded and become more efficient, and its true quality is now shining through more clearly. Greater efforts were made to adjust the economic structure, expand opening up, and improve people’s wellbeing, and steady progress was seen in enhancing the security and resilience of industrial and supply chains. As a result, the economy is growing with better quality and greater substance. Structural improvements were achieved across various industries, urban and rural areas, and all regions. In the first quarter, the shares of value added from equipment manufacturing and high-tech manufacturing in the total value added of industrial enterprises above designated size rose by 1.4 and 1.2 percentage points year on year, respectively. Additionally, the urban-rural per capita disposable income ratio stood at 2.23, a drop of 0.04 from the same period last year. Reform and opening up were advanced, solid progress was made in building a unified national market, and tangible results were delivered in addressing rat race competition. The pilot program for the comprehensive opening up of the service sector was expanded, and the policy benefits of special customs operations in the Hainan Free Trade Port were released at an accelerated pace. The total number of pilot free trade zones nationwide has now risen to 23.

While fully recognizing these achievements, it is also important to note that external uncertainties and unpredictable factors remain numerous, the domestic imbalance between strong supply and weak demand has yet to be resolved, and the foundation for sustained economic recovery and improvement requires further consolidation.

Reporter: Against the backdrop of a complex and changing international landscape, China’s economy has picked up and made a good start. Domestic demand has played an important role in this progress. We have also seen positive changes in investment, as it moved back into positive growth. What are the main drivers behind these shifts? How should we assess investment performance in the first quarter?

Spokesperson: Investment is a crucial engine driving economic and social development. It is also a critical means of optimizing the supply structure and improving people’s wellbeing. In the first quarter of 2026, the year-on-year growth rate of fixed-asset investment (excluding rural households) turned from negative to positive, rising by 1.7%. This positive trend has played an important role in stabilizing the economy, optimizing structures, strengthening growth drivers, and improving people’s wellbeing. The improvements in investment in this quarter were the result of multiple factors working in concert.

First, steady progress in major projects supported the rebound in infrastructure investment. In the opening quarter of the first year of the 15th Five-Year Plan period, efforts were stepped up to tap the potential of effective investment across all fronts. The advance and first batches of major projects, under the national initiative to implement major national strategies and build security capacity in key areas, were released, along with the central budget investment plan for 2026. The funds, including ultra-long special treasury bonds and local government special-purpose bonds, were used more efficiently. The long-term mechanisms for facilitating the participation of private enterprises in major projects were also refined. These efforts have helped expedite the launch and construction of major projects. In the first quarter, infrastructure investment rose by 8.9% year on year, 8.3 percentage points faster than the full-year growth rate for 2025. This performance helped drive overall investment growth across the board.

Second, the vitality unlocked by industrial transformation and upgrading spurred rapid investment growth in emerging sectors. As industrial transformation and upgrading advanced steadily, fields such as AI, the low-altitude economy, and commercial space witnessed robust growth, and investment in advanced manufacturing and modern services continued to expand. In the first quarter, manufacturing investment rose by 4.1% year on year, 3.5 percentage points higher than the full-year increase for 2025. Investment in high-tech manufacturing and high-tech services increased by 5.2% and 12.3%, respectively. Emerging technology-intensive sectors, such as aerospace equipment manufacturing, professional technical services, and information services, all maintained double-digit investment growth. Large-scale equipment upgrades gained momentum, driving a 13.9% increase in investment in equipment and tool purchases.

Third, sustained efforts to improve people’s wellbeing and shore up weaknesses spurred investment in wellbeing-related areas. In the first quarter, there was a 9% year-on-year investment growth in the production and supply of electricity and heat, as well as in ecological protection and environmental governance, significantly outpacing overall investment growth. Steady progress was made in urban renewal and renovation, as well as rural infrastructure construction, with investment in public facilities management up 5.7% and investment in the primary industry up 15.9%. These investments are not only integral to enhancing people’s wellbeing and quality of life, but also crucial for expanding domestic demand.

Looking ahead, the investment potential remains enormous. China’s per capita capital stock is still relatively low compared with that of developed countries. In certain key industrial sectors, investment remains insufficient, and its quality is in need of improvement. Accelerating breakthroughs in the new round of technological revolution and industrial transformation are also generating fresh investment demand. It should be pointed out that as China’s economy transitions to a new stage of development, investment must focus on upgrading quality, specifically, optimizing the investment structure, enhancing quality, and improving returns.

Reporter: Boosting consumption is a priority on China’s economic agenda this year. How would you evaluate consumption performance in the first quarter? This year, the National Bureau of Statistics introduced a new indicator to track online retail sales of goods and services. How did online retail sales perform in the first quarter?

Spokesperson: Since the start of this year, all relevant sectors have continued to implement special initiatives to boost consumption. To leverage peak consumption periods such as holidays and the spring season, a broad range of initiatives have been rolled out. As a result, new areas of consumption growth have been fostered at a faster pace, and consumption scenarios have become more diversified. These efforts have contributed to an overall improvement in the consumer market. In the first quarter, China’s total retail sales of consumer goods reached nearly 13 trillion yuan, up 2.4% year on year. Overall, three key features stand out.

First, goods consumption registered steady growth. In the first quarter, retail sales of goods increased by 2.2% year on year, an acceleration of 0.7 percentage points from the fourth quarter of last year. Large retailers recorded year-on-year sales growth in nearly 80% of commodity categories, with the growth coverage expanding by 11.1 percentage points from the fourth quarter of last year. Sales of daily necessities such as grain, oil, and food grew rapidly. Consumer goods trade-in schemes continued to deliver notable results, with retail sales of communication devices rising by 20.8% and those of cultural and office supplies by 9.3%.

Second, service consumption grew rapidly. First-quarter retail sales of services increased by 5.5% year on year, outpacing retail sales of goods by 3.3 percentage points. Buoyed by the ongoing boom in the holiday culture and tourism market, double-digit growth was maintained in retail sales of cultural, sports, and leisure services, as well as travel consultation and rental services. As consumers shift from buying goods to enjoying services, demand for cultural and intellectual enrichment continues to grow and find outlets, with experiential and quality-oriented consumption steadily gaining traction. Service consumption is thus gradually emerging as an important engine of overall consumption growth.

Third, online consumption and smart product consumption showed strong growth impetus. An important change in the consumption-related indicators released this year was the introduction of a new indicator for “online retail sales of goods and services” and the discontinuation of the previous indicator for “online retail sales.” By encompassing both goods and services, this new indicator provides a fuller picture of overall online consumption. In the first quarter, online retail sales of goods and services grew 8% year on year, significantly outpacing total retail sales of consumer goods. Consumption of smart products also remained robust, with retail sales of smart wearable devices such as smart watches and glasses nearly doubling year on year, and retail sales of smartphones jumping by almost 30%. These rapidly developing new forms of consumption are not only better aligned with consumer demand, but are also providing fresh impetus for economic development.

Reporter: Prices are a barometer of economic performance and the most sensitive indicator of supply and demand dynamics. Amidst the complex and changing situation in the Middle East, international energy prices have experienced significant volatility. However, prices in China have risen moderately and remained broadly stable. How should we view the first-quarter price data? Do they signal a positive improvement in China’s economic flows?

Spokesperson: Since late February, the international environment has undergone significant changes. Geopolitical conflict in the Middle East has caused major disruptions to the international energy market and industrial and supply chains, intensifying inflationary pressures worldwide. Despite this, prices in China have remained stable thanks to our complete industrial system, ample supply of goods and services, strong overall energy production capacity, significant progress in building a new type of energy system, and robust measures to ensure the supply and price stability of essential goods. In addition, the vigorous growth of new drivers and improvements in market competition order have helped enhance the dynamics between supply and demand, supporting a moderate rebound in prices.

Tourists enjoy the beautiful scenery of Jinpo Scenic Area in the Baili Azalea Nature Reserve in Bijie City, Guizhou Province, March 29, 2026. The culture and tourism market in China has continued to thrive since the beginning of the year. XINHUA / PHOTO BY FAN HUI

In terms of consumer prices, China’s Consumer Price Index (CPI) rose by 0.9% year on year in the first quarter, 0.4 percentage points more than last year’s fourth quarter growth, marking the second consecutive quarter of expansion. The core CPI, which excludes food and energy prices, increased 1.2%. In March, the CPI rose by 1% year on year, with the core CPI up 1.1%. In recent months, year-on-year growth has remained generally stable at above 1%, signaling a continued trend of moderate growth. The modest CPI recovery is attributable to steady growth of domestic consumer demand and improvement in market supply and demand dynamics. It also positively reflects the solid progress made in regulating production capacity in key industries and improvements in market competition order. For instance, efforts to prevent and address rat race competition have achieved steady progress and tangible results in sectors such as the platform economy and new energy vehicles. In the first quarter, prices of industrial consumer goods, excluding energy, rose by 2.5% year on year, an increase of 1.4 percentage points over the rate for 2025 as a whole. Within this category, year-on-year price declines for both internal combustion engine vehicles and new energy vehicles narrowed compared with 2025 as a whole.

In terms of production prices, the Producer Price Index (PPI) for industrial products fell 0.6% year on year in the first quarter, with the decline narrowing by 1.5 percentage points compared with the fourth quarter of last year. The PPI moved from a 0.9% year-on-year decline in February to a 0.5% increase in March, ending 41 consecutive months of year-on-year decline. While the shift to growth was partly driven by the upswing in international commodity prices, it was mainly due to a further improvement in domestic supply and demand dynamics, stronger impetus from new growth drivers, and better market competition order, all of which indicate a positive turn in economic performance. For instance, the acceleration in intelligent and green upgrading in industry, together with the robust development of the AI Plus Initiative, has helped drive up prices for related products. In March, prices in the optical fiber and electronic specialty materials manufacturing sectors rose by 76.1% and 18.7% year on year, respectively. The rebound in the PPI is conducive to boosting corporate profitability and expectations, facilitating smooth flows in the national economy, and consolidating the microeconomic foundations for sustained recovery and growth.

Overall, geopolitical conflict in the Middle East has sharply pushed up international commodity prices, including crude oil. This has exerted some impact on domestic prices, but on the whole, the effects have been limited and manageable. The moderate recovery in prices in the first quarter was mainly driven by the improvement in domestic supply and demand dynamics, which is conducive to sustaining positive momentum for economic development.

Reporter: This year’s central government work report has set an economic growth target of 4.5–5%. What are the main challenges to achieving the annual growth target? What should we expect from China’s economic performance in the coming period?

Spokesperson: Looking ahead, China’s economy will continue to face both new challenges and long-standing issues. The external environment is becoming more complex and volatile, creating greater uncertainty and unpredictability. Geopolitical risks are on the rise, global economic momentum remains weak, and multilateralism and free trade are under severe threat. Domestically, China has reached a critical juncture in shifting growth drivers and transforming its development model. The task of replacing old growth drivers remains formidable, and the imbalance between strong supply and weak demand remains pronounced. Some enterprises are facing difficulties in their operations, and it has become more challenging for people to secure employment and earn more income. These issues have placed a certain degree of pressure on stable economic growth. However, they are ultimately challenges that come with progress and development, and with sustained effort, they can be resolved and overcome. Taking all factors into account, China enjoys institutional strengths, market potential, innovation vitality, and policy guarantees. It has the foundation, support, and conditions needed to keep the economy running smoothly, achieve this year’s targets, and deliver high-quality development.

In terms of momentum, the economy’s strong start in the first quarter has laid a solid foundation for development for the rest of the year. Proactive macro policies are effectively driving the pickup in economic growth. Key industries and sectors also continue to lead the way and drive broader progress. Meanwhile, supported by the improvement in supply and demand dynamics and other factors, positive developments continue to accumulate: prices are showing positive changes, corporate performance is gradually improving, and physical volume indicators, such as passenger and freight turnover and electricity generation and consumption, are growing steadily. These achievements are a reflection of the stable foundation, multiple strengths, strong resilience, and vast potential of the Chinese economy. They have bolstered confidence across the board in China’s economic development and laid a solid foundation for sustained economic growth throughout the year.

Turning to the shift in growth drivers, the robust development of new drivers is injecting fresh vitality into economic development. In recent years, China has continued to promote the full integration of technological and industrial innovation. A series of policy measures that have been implemented, together with the accumulated gains of long-term development, are now being translated into tangible progress in the cultivation of new quality productive forces. Positive and notable headway has been made in structural adjustment and the shift in growth drivers. New drivers have matured and strengthened and are playing an increasingly pivotal role. Our research indicates that order books across many emerging sectors are strong, pointing to promising development prospects. As technological innovation and industrial upgrading continue, the expansion of new growth drivers will provide sustained support for high-quality development.

Turning to the policy environment, strong and effective macro policies have provided solid support for economic development. China has made continuous headway in refining and innovating macroeconomic governance, expanding its policy toolkit, and enhancing the forward-looking, targeted, and effective nature of macro policies. In the coming period, solid steps will be taken to implement major national strategies and enhance security capacity in key fields and to carry out large-scale equipment upgrades and consumer goods trade-in programs. The launch and construction of major projects under the 15th Five-Year Plan will pick up pace, and the special fiscal-financial coordination fund for boosting domestic demand will be better leveraged. All this will help further unlock the potential of domestic demand. Moreover, the effective implementation of a range of measures, including the strategy to upgrade pilot free trade zones, the diversification of trade markets, credit and export credit insurance support, and the expansion and upgrading of the model combining cross-border e-commerce with overseas warehouses, will help maintain the scale and improve the structure of foreign trade, thereby providing effective support for economic growth.

In terms of development space, continued reform and opening up has created greater strategic room for economic development. Since the beginning of this year, solid progress has been made in building a unified national market, and comprehensive measures have been adopted to address rat race competition. These efforts have played a significant role in improving the market environment and enhancing the efficiency of resource allocation, while also contributing to the steady expansion of domestic demand. At present, all departments are stepping up their efforts to carry out the key tasks set out in the central government work report. Reform measures in key areas such as expanding domestic demand, increasing incomes, and promoting innovation will be implemented in an increasingly refined manner. A series of major strategic initiatives, reform measures, and key projects under the 15th Five-Year Plan will also be rolled out in succession. Emerging fields such as digital and green trade are also experiencing accelerated development. All of this will continue to open up new space for economic development.

Reporter: Thank you both for this interview.

(Originally appeared in Qiushi Journal, Chinese edition, No. 9, 2026)